Nifty retreats from record highs; manages to hold 8150 mark

After witnessing a record-breaking previous session, nifty consolidated and ended with a marginal cut of over two tenths of a percent, tad above its 8150 mark. Today’s weakness was largely on the back of profit booking by cautious investors ahead of Supreme Court’s verdict in the coal allocations case. Besides, weakness in rupee and sluggishness in global markets dampened the trading sentiment. However, losses remain capped as Organisation for Economic Cooperation and Development (OECD) in its latest report stated that Indian economic growth continues to gain momentum. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 1,162.98 crore on September 08, 2014.

After a negative opening, nifty gradually enlarged its losses and slipped below the 8150 level in late morning deals. Thereafter, the key indices failed to show any kind of fervor due to lack of encouraging leads. The key gauges traded on a lackluster note for most part of the trades. However, some short covering in last leg of trade helped Nifty to ease some of its losses. The market is likely to remain volatile this week, as the government will issue figures on growth in index of industrial production (IIP) and consumer price index (CPI)-based inflation for July and August, respectively, on September 12, 2014.

The top gainers from the F&O segment were Idea Cellular, Ashok Leyland and Jain Irrigation Systems. The top losers were Unitech, Bata India and Indiabulls Real Estate. In the index options segment, maximum OI continues to be seen in the 8200-8100 calls and 8000-7900 puts indicating the expected trading range.

Most of the sectoral indices on the NSE were settled in the red, CNX IT declined by 0.88%, CNX Realty down by 0.79%, CNX Finance down by 0.33%, Bank Nifty down by 0.31%, CNX Energy down by 0.29%, CNX Media down by 0.13% and CNX Metal down by 0.07% remained the losers in the trade, while CNX FMCG up by 0.90%, CNX Auto up by 0.44%, CNX Pharma up 0.18% and CNX PSU Bank up by 0.14% remained the only gainers in the trade.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.27% and reached 12.75. The 50-share CNX Nifty decreased by 20.95 points or 0.26% to settle at 8,152.95.

Nifty September 2014 futures closed at 8182.2 on Tuesday at a premium of 29.25 points over spot closing of 8,152.95, while Nifty October 2014 futures ended at 8226.3 at a premium of 73.35 points over spot closing. Nifty September futures saw contraction of 0.65 million (mn) units, taking the total outstanding open interest (OI) to 15.17 mn units. The near month derivatives contract will expire on September 25, 2014.

From the most active contracts, HDFC Bank September 2014 futures traded at a premium of 6.05 points at 871.55 compared with spot closing of 865.50. The number of contracts traded were 10,731.

Reliance Industries September 2014 futures traded at a premium of 6.95 points at 1036.95 compared with spot closing of 1,030.00. The number of contracts traded were 19,518.

Tata Motors September 2014 futures traded at a premium of 2.80 points at 520.1 compared with spot closing of 517.30. The number of contracts traded were 13,632.

Tata Steel September 2014 futures traded at a premium of 3.05 points at 521.35 compared with spot closing of 518.30. The number of contracts traded were 13,328.

Crompton Greaves September 2014 futures traded at a premium of 1.15 points at 241.2 compared with spot closing of 240.05. The number of contracts traded were 16,529.

Among Nifty calls, 8200 SP from the September month expiry was the most active call with a contraction of 0.22 million open interests. Among Nifty puts, 8,100 SP from the September month expiry was the most active put with an addition of 0.54 million open interests. The maximum OI outstanding for Calls was at 8200 SP (5.59 mn) and that for Puts was at 8,000 SP (8.78 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8176.17 --- Pivot Point 8151.33 --- Support --- 8128.12.

The Nifty Put Call Ratio (PCR) finally stood at 1.26 for September month contract. The top five scrips with highest PCR on OI were Sun TV (1.42), Jubilant Foodworks (1.12), Kotak Bank (1.10), Indiabulls Real Estate (1.04) and YES Bank (0.98). 

Among most active underlying, State Bank of India witnessed an addition of 0.04 million of Open Interest in the September month futures contract, followed by Apollo Tyres witnessing a contraction of 0.69 million of Open Interest in the September month contract; while Tata Steel witnessed a contraction of 0.20 million of Open Interest in the September month futures contract, Tata Motors witnessed an addition 1 million of Open Interest in the September month contract and Reliance Industries witnessed an addition of 0.01 million of Open Interest in the September month's future contract.