Nifty tumbles lower for sixth day in a row; ends below 8700 level

The fifty stock index -- Nifty -- closed in the red territory for the sixth consecutive session weighed down by global worries and some disappointing earnings announcement. Traders anticipating AAP win in elections in the national capital felt jittery, as the result may show loss of popularity for the ruling BJP and become a drag on the awaited reforms, while Arvind Kejriwal-led Aam Aadmi Party (AAP) may go for populist measures, if it comes to power. Further, selling by foreign funds in the past few sessions also weighed on market sentiment. Foreign portfolio investors sold shares worth a net Rs 27.43 crore on February 05, 2015. However, losses remained capped with an HSBC report that India's manufacturing and services sectors expanded at a faster pace than China in January. Among the four largest emerging economies, HSBC said that only India bucked the trend and recorded one of the fastest growth in January. Meanwhile, some traders remained on the sidelines and refrained from any buying activity ahead of the GDP and inflation data due next week after the central bank held interest rates steady on Tuesday, leaving its next move probably until after the government's annual budget on February 28.

The benchmark got off to a somber opening, extending the downtrend for the sixth straight session as pessimistic sentiments prevailed across Asian markets. The selling pressure accentuated in the mid morning trades as investors took to across the board risk aversion. The key gauges made some attempts to claw back into the green zone in early afternoon trades but profit booking at higher levels dragged the key indices to the lowest point in the session. Though the index recovered from the lows of the day but could not succeed in minimizing the huge losses by the end of trading session. Eventually, Nifty ended the sluggish day of trade with a cut of over 50 points below its crucial 8,700 mark.

Most of the sectoral indices on the NSE settled in the negative territory with CNX Auto losing the most, ending with a loss of over two and a half percent followed CNX Pharma down by 1.73% and Bank Nifty up by 1.39% while, CNX FMCG up 0.91% and CNX IT up by 0.85% remained the only gainers on NSE sectoral space.

The top gainers from the F&O segment were HDIL, India Cements and Indiabulls Real Estate. On the other hand, the top losers were PTC, Apollo Tyre and Sun TV. In the index options segment for February series, maximum OI continues to be seen in the 9000-8900 calls and 8300-8500 puts indicating the expected trading range.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.34% and reached 20.68. The 50-share CNX Nifty was down by 50.65 points or 0.58% to settle at 8,661.05. Nifty February 2015 futures closed at 8711.90 on Friday at a premium of 50.85 points over spot closing of 8661.05, while Nifty March 2015 futures ended at 8774 at a premium of 112.95 points over spot closing. Nifty February futures saw addition of 0.13 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, Axis Bank February 2015 futures traded at a premium of 0.60 points at 563.75 compared with spot closing of 563.15. The number of contracts traded were 36,596.

SBI February 2015 futures traded at a premium of 2.10 points at 292.40 compared with spot closing of 290.30. The number of contracts traded were 33,602.

Tata Motors February 2015 futures traded at a premium of 3.90 points at 563.50 compared with spot closing of 559.60. The number of contracts traded were 32,842.

HDFC Bank February 2015 futures traded at a premium of 5.15 points at 1058.65 compared with spot closing of 1053.50. The number of contracts traded were 25,714.

ICICI Bank February 2015 futures traded at a discount of 2.40 points at 331.75 compared with spot closing of 329.35. The number of contracts traded were 24,140.

Among Nifty calls, 9000 SP from the February month expiry was the most active call with a contraction of 0.78 million open interests. Among Nifty puts, 8,600 SP from the February month expiry was the most active put with a contraction of 0.05 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.86 mn) and that for Puts was at 8,300 SP (3.01 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8709.65 --- Pivot Point 8677.60 --- Support --- 8629.00.

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 Bata India (3.03), HCL Tech (1.17), Infosys (1.04), SSLT (1.04) and L&T (1.02). 

Among most active underlying, Tata Motors witnessed an addition of 0.87 million of Open Interest in the February month futures contract, followed by State Bank of India witnessing a contraction of 1.64 million of Open Interest in the February month contract; Axis Bank witnessed a contraction of 0.37 million of Open Interest in the February month contract, ICICI Bank witnessed an addition of 2.08 million of Open Interest in the February month contract and Infosys witnessed an addition of 0.02 million of Open Interest in the February month's future contract.