Nifty ends below 8,050 mark on weak industrial production data

The fifty stock index -- Nifty -- ended the choppy day of trade with a cut of over seven-tenths of a percent. After gap down opening, nifty languished in the red on heavy selling by funds and retail investors due to weak industrial production data. Among macro economic data, India's industrial output growth hit a four-month low in July when it grew much slower-than-expected 0.5 percent year-on-year. Besides, Retail inflation has edged down marginally to 7.8 percent in August from 7.96 percent a month earlier. Furthermore, a weak trend on other Asian bourses coupled with the depreciation in rupee value against the dollar too dampened the sentiment. However, some respite came from positive WPI inflation, which the pulled the index from day’s low level. Traders also drew some solace from RBI’s governor’s statement that India's macroeconomic indicators were improving and that inflation was coming down consistent with the central bank's forecast. The index traded in a range until some mild selling emerged in final half hour, which pressurized the index to conclude its session below 8050 mark. Stocks from Healthcare, Realty and Infrastructure counters were supporting the markets’ uptrend, while those from Metal, Oil & Gas and IT counters were adding to the underlying cautious undertone.

After today’s correction, Nifty may correct more as Investors were cautious ahead of the Supreme Court verdict on coal block allocations, expected before September 27, 2014. The apex court had ruled on August 25 that all coal block allocations since 1993 are illegal. Besides, some investors await outcome of the Fed's two-day meeting ending on Thursday for near-term direction as a recent string of improving U.S. economic data like domestic retail sales has raised expectations the Fed may act sooner to raise interest rates.

The top gainers from the F&O segment were CESC, Unitech and Lupin. The top losers were Yes Bank, Voltas and Jindal Steel & Power. 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.

Most of the sectoral indices on the NSE were settled in the red, CNX Metal declined by 1.60%, CNX Energy down by 0.95%, CNX IT down by 0.82%, CNX Finance down by 0.62%, CNX FMCG down by 0.57%, Bank Nifty down by 0.53% and CNX Auto down by 0.31%, while CNX Media up by 1.36%, CNX Pharma up by 0.72%, CNX PSU Bank up by 0.51% and CNX Realty up by 0.51% were remained the gainers in the trade.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.89% and reached 13.25. The 50-share CNX Nifty decreased by 63.50 points or 0.78% to settle at 8,042.00. Nifty September 2014 futures closed at 8062.55 on Monday at a premium of 20.55 points over spot closing of 8,042.00, while Nifty October 2014 futures ended at 8107.15 at a premium of 65.15 points over spot closing. Nifty September futures saw contraction of 0.24 million (mn) units, taking the total outstanding open interest (OI) to 13.44 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 6.40 points at 865.45 compared with spot closing of 859.05. The number of contracts traded were 10,988.

Reliance Industries September 2014 futures traded at a premium of 5.95 points at 1007.55 compared with spot closing of 1,001.60. The number of contracts traded were 18,390.

Tata Steel September 2014 futures traded at a premium of 1.90 points at 508.55 compared with spot closing of 506.65. The number of contracts traded were 10,721.

Lupin September 2014 futures traded at a premium of 3.80 points at 1421.80 compared with spot closing of 1418.00. The number of contracts traded were 14,027.

Yes Bank September 2014 futures traded at a premium of 4.70 points at 602.80 compared with spot closing of 598.10. The number of contracts traded were 14,682.

Among Nifty calls, 8100 SP from the September month expiry was the most active call with an addition of 0.32 million open interests. Among Nifty puts, 8,000 SP from the September month expiry was the most active put with a contraction of 1.02 million open interests. The maximum OI outstanding for Calls was at 8200 SP (7.23 mn) and that for Puts was at 8,000 SP (7.47 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8069.53 --- Pivot Point 8049.77 --- Support --- 8022.23.

The Nifty Put Call Ratio (PCR) finally stood at 1.03 for September month contract. The top five scrips with highest PCR on OI were OFSS (1.60), CIPLA (1.27), SUNTV (1.21), Kotak Bank (1.13) and PNB (1.04). 

Among most active underlying, State Bank of India witnessed a contraction of 0.08 million of Open Interest in the September month futures contract, followed by Yes Bank witnessing an addition of 0.27 million of Open Interest in the September month contract; while Cipla witnessed an addition of 0.42 million of Open Interest in the September month futures contract, Reliance Industries witnessed an addition 0.08 million of Open Interest in the September month contract and Tata Steel witnessed a contraction of 0.52 million of Open Interest in the September month's future contract.