Nifty makes a negative closing after a range-bound session

The fifty stock index -- Nifty -- continued its consolidation for third consecutive day on Wednesday and finished the range bound day of trade with a cut of around a quarter of a percentage from its previous close. After negative opening, nifty showed some strength in early morning trades but then start drifting lower however; it failed to breach the narrow 41-point range for most part of the day, ending the session below its crucial 7,950 mark.

Sentiments on the street weakened after data released by the Controller General of Accounts revealed that Fiscal deficit touched 74.9 percent of the Budget Estimates for 2014-15 to cross Rs 3.97 lakh crore at the end of August. It also showed that the total expenditure of the government during April-August was over Rs 6.72 lakh crore or 37.5 percent of the estimates for the entire 2014-15 fiscal. However, gains in IT and TECK stocks have restrained the market to extend losses. Some support also came in from RBI’s statement that the country's GDP growth, which it estimates to be 5.5% in the current fiscal, will improve to 6.3% in 2015-16. Furthermore, led by healthy growth in coal, cement and electricity sectors, the eight core industries grew by 5.8% in August this year against 4.7% in the same month last year.

Meanwhile, some participants remained on the sidelines and refrained from any buying activity in view of a holiday-shortened week as markets will remain closed on Thursday and Friday for Mahatma Gandhi Jayanthi and Dussehra, respectively. The market is also closed on Monday, October 6, for Bakri Id.

The top gainers from the F&O segment were Bata India, Jubilant Foods and Wipro. The top losers were PTC, Apollo Tyre and MRF. In the index options segment, maximum OI continues to be seen in the 8200-8100 calls and 7800-7900 puts indicating the expected trading range. Meanwhile, India VIX - the gauge of underlying volatility in the market - has declined in today's session, which indicates that traders have slowdown buying options contracts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.10% and reached 13. The 50-share CNX Nifty declined by 19.25 points or 0.24% to settle at 7,945.55. Nifty October 2014 futures closed at 7983.65 on Wednesday at a premium of 38.10 points over spot closing of 7,945.55, while Nifty November 2014 futures ended at 8031.65 at a premium of 86.10 points over spot closing. Nifty October futures saw an contraction of 0.06 million (mn) units, taking the total outstanding open interest (OI) to 15.63 mn units. The near month derivatives contract will expire on October 30, 2014.

From the most active contracts, Reliance Industries October 2014 futures traded at a premium of 7.40 points at 934.65 compared with spot closing of 927.25. The number of contracts traded were 15,946.

Jindal Steel & Power October 2014 futures traded at a premium of 3.55 points at 171.95 compared with spot closing of 168.40. The number of contracts traded were 11,104.

Tata Steel October 2014 futures traded at a premium of 4.15 points at 452.15 compared with spot closing of 448.00. The number of contracts traded were 11,792.

Bank of India October 2014 futures traded at a premium of 1.20 points at 234.25 compared with spot closing of 233.05. The number of contracts traded were 10,512.

ICICI Bank October 2014 futures traded at a premium of 10.00 points at 1437.70 compared with spot closing of 1427.70. The number of contracts traded were 11,931.Among Nifty calls, 8100 SP from the October month expiry was the most active call with an addition of 0.26 million open interests. Among Nifty puts, 7,900 SP from the October month expiry was the most active put with a contraction of 0.59 million open interests. The maximum OI outstanding for Calls was at 8200 SP (5.44 mn) and that for Puts was at 7,800 SP (5.83 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7969.80--- Pivot Point 7953.25--- Support --- 7929.00.

The Nifty Put Call Ratio (PCR) finally stood at 1.10 for October month contract. The top five scrips with highest PCR on OI were Bajaj-Auto (1.05), TCS (1.03), Sun Pharma (0.99), Auro Pharma (0.88) and Kotak Bank (0.93). 

Among most active underlying, Infosys witnessed a contraction of 0.05 million of Open Interest in the October month futures contract, followed by State Bank of India witnessing an addition of 0.08 million of Open Interest in the October  month contract; while Tata Steel witnessed an addition of 0.06 million of Open Interest, Maruti Suzuki witnessed an addition of 0.02 million of Open Interest in the October month contract and Tata Consultancy Services witnessed an addition of 0.08 million of Open Interest in the October month's future contract.