Nifty slips lower for third day in a row

The fifty stock index -- Nifty -- extended its downfall for third consecutive day and finished the volatile day of trade with a cut of around one tenth of a percent on emergence of profit-booking in blue-chip stocks. Besides, weakness in global markets due to growing concerns over China's slower economic growth and speculation that the Fed may increase the interest rates sooner-than-expected also dampened the domestic sentiments. Some weakness also came from report that foreign funds and domestic institutional investors turned sellers on Wednesday. However, gains in Capital Goods, Auto and Power stocks have restrained the market to extend losses. Some support also came from United Nations Conference on Trade and Development’s (UNCTAD) report that Indian economy will grow at a rate of 5.6 percent in 2014. Meanwhile, shares of disinvestment candidates such as ONGC, Coal India and NHPC were trading lower by around 4% after the Union Cabinet on Wednesday cleared a dilution of the government's stake in these companies. On the flip side, Shares of fertilisers companies were trading higher after Ananth Kumar, Minister for Chemicals & Fertilizers, stated that the government proposes to come out with a new fertilizer policy.

After a gap-up opening and maintaining a positive bios in early morning trades, nifty slipped into the negative zone in the afternoon on account of pessimistic sentiment and profit booking by traders, however low level buying on hopes of encouraging IIP and CPI data for July and August to be released on Friday cut most of its losses.

The top gainers from the F&O segment were Motherson Sumi Systems, Eicher Motors and Bharat Forge. The top losers were Ranbaxy Laboratories, Sun Pharmaceuticals Industries and NHPC. In near term, the market will turn volatile and participants will preferred to book profits at every rise. However, some investors have big expectation on IIP and CPI data for July and August to be released on tomorrow. In the index options segment, maximum OI continues to be seen in the 8300-8200 calls and 8000-7900 puts indicating the expected trading range.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 3.19% and reached 12.51. The 50-share CNX Nifty decreased by 8.40 points or 0.10% to settle at 8,094.10. Nifty September 2014 futures closed at 8119.40 on Thursday at a premium of 33.70 points over spot closing of 8,085.70, while Nifty October 2014 futures ended at 8162.95 at a premium of 77.25 points over spot closing. Nifty September futures saw contraction of 0.56 million (mn) units, taking the total outstanding open interest (OI) to 13.92 mn units. The near month derivatives contract will expire on September 25, 2014.

From the most active contracts, IDFC September 2014 futures traded at a premium of 1.00 points at 151.00 compared with spot closing of 150.00. The number of contracts traded were 25,694.

Tata Global Beverages September 2014 futures traded at a premium of 0.90 points at 168.40 compared with spot closing of 167.50. The number of contracts traded were 13,911.

Reliance Industries September 2014 futures traded at a premium of 6.55 points at 1021.75 compared with spot closing of 1,015.20. The number of contracts traded were 22,268.

Tata Steel September 2014 futures traded at a premium of 2.60 points at 519.35 compared with spot closing of 516.75. The number of contracts traded were 13,382.

Bank of India September 2014 futures traded at a discount of 0.50 points at 287.60 compared with spot closing of 288.10. The number of contracts traded were 11,693.

Among Nifty calls, 8200 SP from the September month expiry was the most active call with an addition of 0.56 million open interests. Among Nifty puts, 8,100 SP from the September month expiry was the most active put with an addition of 0.12 million open interests. The maximum OI outstanding for Calls was at 8200 SP (6.33 mn) and that for Puts was at 8,000 SP (8.28 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8123.33 --- Pivot Point 8090.32 --- Support --- 8052.68.

The Nifty Put Call Ratio (PCR) finally stood at 1.17 for September month contract. The top five scrips with highest PCR on OI were Eicher Motors (7.00), Kotak Bank (1.17), Sun TV (1.12), Bata India (1.09) and Cipla (1.04). 

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 IDFC witnessing a contraction of 1.72 million of Open Interest in the September month contract; while Reliance Industries witnessed a contraction of 0.24 million of Open Interest in the September month futures contract, Tata Steel witnessed an addition 0.64 million of Open Interest in the September month contract and ICICI Bank witnessed a contraction of 0.33 million of Open Interest in the September month's future contract.