Nifty trims losses; ends below 8,800 mark

The fifty stock index -- Nifty -- continued its southward journey for second consecutive day on Monday and finished the volatile session of trade with a cut of over eleven points. Sentiments took a hit after the HSBC India Manufacturing Purchasing Managers' Index (PMI) fell to 52.9 in January 2015 from December's two-year record high of 54.5, but the data indicated that the Indian manufacturing sector continued to grow solidly during the month. Besides, investors also remained worried over a huge shortfall in tax deducted at source (TDS) collections, the Central Board of Direct Taxes (CBDT) has asked the income tax department (I-T) to initiate special measures to achieve the collection target for this financial year. However, investors got some support from report that overseas investors pumped in a staggering Rs 33,688 crore in capital markets last month, making it the highest investment in six months owing to easing inflation and rate cut by Reserve Bank of India (RBI). Meanwhile, some traders remained on the sidelines and refrained from any buying activity ahead of RBI’s bimonthly monetary policy review on Tuesday.

After initial slump due to global cues and profit- taking, the market rebounded in a dramatic fashion in mid- afternoon, which helped the index to break into the positive territory but only for a brief period tracking the leads from European counterparts. But some final hour profit booking followed by mild short covering ensured the key index to end session with a marginal cut of eleven points. Most of the sectoral indices on the NSE settled in the negative territory with CNX FMCG losing the most, ending with a loss of over one and a half percent followed by CNX Pharma down by 0.56% and CNX Media up by 0.50% while, CNX IT up 1.01%, CNX Realty up 0.55% and CNX Auto up by 0.51% remained the top gainers on NSE sectoral space.

The top gainers from the F&O segment were IFCI, UBL and HCL Tech. On the other hand, the top losers were TVS Motor, Asian Paint and Hindustan Petroleum Corporation. In the index options segment for February series, maximum OI continues to be seen in the 9000-9100 calls and 8500-8700 puts indicating the expected trading range.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 1.15% and reached 20.40. The 50-share CNX Nifty was down by 11.50 points or 0.13% to settle at 8,797.40. Nifty February 2015 futures closed at 8859.65 on Monday at a premium of 62.25 points over spot closing of 8797.40, while Nifty March 2015 futures ended at 8918.65 at a premium of 121.25 points over spot closing. Nifty February futures saw contraction of 0.53 million (mn) units, taking the total outstanding open interest (OI) to 24.96 million (mn) units. The near month derivatives contract will expire on February 26, 2015.

From the most active contracts, State Bank of India February 2015 futures traded at a premium of 1.60 points at 310.15 compared with spot closing of 308.55. The number of contracts traded were 29,088.

ICICI Bank February 2015 futures traded at a premium of 2.35 points at 354.85 compared with spot closing of 352.50. The number of contracts traded were 34,462.

HDFC Bank February 2015 futures traded at a premium of 11.30 points at 1093.50 compared with spot closing of 1082.20. The number of contracts traded were 33,751.

Reliance Industries February 2015 futures traded at a premium of 7.70 points at 916.20 compared with spot closing of 908.50. The number of contracts traded were 20,075.

Axis Bank February 2015 futures traded at a premium of 1.35 points at 622.10 compared with spot closing of 620.75. The number of contracts traded were 43,360.

Among Nifty calls, 9000 SP from the February month expiry was the most active call with a contraction of 0.15 million open interests. Among Nifty puts, 8,700 SP from the February month expiry was the most active put with an addition of 0.13 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.13 mn) and that for Puts was at 8,600 SP (2.46 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8841.77--- Pivot Point 8796.43--- Support --- 8752.07.

The Nifty Put Call Ratio (PCR) finally stood at 0.87 for February month contract. The top five scrips with highest PCR on OI were UBL (2.44), Grasim (1.49), IndusInd Bank (1.39), Apollo Hospitals Enterprise (1.06) and L&T (1.02). 

Among most active underlying, ICICI Bank witnessed an addition of 10.04 million of Open Interest in the February month futures contract, followed by Axis Bank witnessing an addition of 1.60 million of Open Interest in the February month contract; Coal India witnessed an addition of 5.18 million of Open Interest in the February month contract, State Bank of India witnessed an addition of 5.58 million of Open Interest in the February month contract and Yes Bank witnessed an addtion of 1.77 million of Open Interest in the February month's future contract.