Rail budget proves to be a low key affair; Nifty ends below 8700 mark

The Railway Budget 2015 turned out to be a low key affair for the equity markets as it failed to bolster sentiments in the local markets which snapped the day’s trade with a cut of around a percent point as expiry of February derivative contracts and caution ahead of federal budget on Saturday weighed on sentiment. Although, there was some major announcement in the rail Budget like, Rs 8.5 lakh crore investment over next five years, provision of Rs 120 crore for lifts, escalators at major stations, Rs 96182 crores for capacity expansion and keeping the Operating ratio for FY16 at 88.5% against 91.8% for FY15. Sentiments weighed down as global rating agency Moody's, in its report clarified that fiscal policies and structural reforms will determine India's sovereign credit profile and not recent revisions to the economic growth data. However, loses remained capped with positive statement of the Standard & Poor's (S&P), terming India as the ‘bright spot’ in Asia Pacific, failed to encourage the market mood. S&P sharply revised upwards country's GDP forecast to 7.9 per cent next fiscal and even higher 8.2 per cent in the year after. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 516.06 crore on February 25, 2015.

Earlier, domestic index CNX Nifty made subdued opening as funds and retail investors were engaged in reducing positions ahead of the Rail Budget. The key index failed to show any kind of fervor due to lack of encouraging leads and traded on a lackluster note for most part of the trades. However, mild short covering in the final hour of trade helped Nifty to ease some of its losses. Barring Energy and Realty, all other NSE sectoral indices ended significantly in the red. Among them, CNX PSU Bank index fell the most by 2.25 per cent, followed by CNX Auto 1.60 per cent and CNX Media 1.36 per cent.

The February derivative contracts which expired today recorded the highest turnover in the F&O segment at Rs 5.81 lakh crore. Many traders rolled over positions in the futures & options (F&O) segment from the February 2015 series to March 2015 series. On provisional basis market has witness Rollover of 78% in Nifty futures compare 76.52% of total rollover of January series. Sectorally, FMCG, oil & gas and technology stocks are witnessing high rollover of positions while stocks from the finance, cement and automobile space are witnessing relatively low rolls into the March series.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.94% and reached 20.58. The 50-share CNX Nifty was down by 83.40 points or 0.95% to settle at 8,683.85.  Nifty March 2015 futures closed at 8729.65 on Thursday at a premium of 45.80 points over spot closing of 8683.85, while Nifty April 2015 futures ended at 8789.55 at a premium of 105.70 points over spot closing. Nifty March futures saw an addition of 4.21 million (mn) units, taking the total outstanding open interest (OI) to 23.98 million (mn) units. The near month derivatives contract will expire on March 26, 2015.

From the most active contracts, SBI March 2015 futures traded at a premium of 2.30 points at 291.70 compared with spot closing of 289.40. The number of contracts traded were 34,795.

ICICI Bank March 2015 futures traded at a premium of 1.90 points at 323.80 compared with spot closing of 321.90. The number of contracts traded were 30,529.

HDFC Bank March 2015 futures traded at a premium of 11.45 points at 1051.05 compared with spot closing of 1039.60. The number of contracts traded were 51,358.

Reliance Industries March 2015 futures traded at a premium of 0.50 points at 849.00 compared with spot closing of 848.50. The number of contracts traded were 42,038.

Aurobindo Pharma March 2015 futures traded at a premium of 1.50 points at 1035.20 compared with spot closing of 1033.70. The number of contracts traded were 32,409.Among Nifty calls, 9000 SP from the March month expiry was the most active call with an addition of 0.80 million open interests. Among Nifty puts, 8500 SP from the March month expiry was the most active put with an addition of 0.42 million open interests. The maximum OI outstanding for Calls was at 9000 SP (3.86 mn) and that for Puts was at 8,500 SP (3.28 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8756.78 --- Pivot Point 8713.12 --- Support --- 8640.18.

The Nifty Put Call Ratio (PCR) finally stood at 0.91 for March month contract. The top five scrips with highest PCR on OI were Mcleod Russel India (3.29), Petronet (1.59), India Cements (1.34), JSW Steel (1.28) and Dr. Reddy's Laboratories (1.22). 

Among most active underlying, State Bank of India witnessed an addition of 2.41 million of Open Interest in the March month futures contract, followed by ICICI Bank witnessing an addition of 2.08 million of Open Interest in the March month contract; HDFC Bank witnessed an addition of 8.47 million of Open Interest in the March month contract, Wockhardt witnessed an addition of 8.40 million of Open Interest in the March month contract and Larsen & Toubro witnessed an addition of 1.93 million of Open Interest in the March month's future contract.