Nifty makes triple digit losses; closes below 8,800 level

Bears hammered bulls throughout the session giving bulls no chance to pounce back, taking full control over the market, bears dragged Nifty below its crucial 8,800 mark. The index fell more than 2 percent, their biggest single-day drop in two months, on increased expectation of a rate hike by U.S. Federal Reserve following stronger-than-expected jobs data. The Fed has held interest rates close to zero for more than six years to stimulate growth following the 2008 global crisis. But Friday's announcement that employers added 295,000 jobs last month, which was far above expectations of about 235,000, fueled expectations unemployment would fall further and inflation might pick up. Back home, Investors remained cautious with an Assocham's post-Budget survey of CEOs and CFOs, where majority of them have said that they find revised GDP data of over 7 percent growth as 'too good to be realistic' and too optimistic since the underlying situation is not all that upbeat. Market-participants failed to draw any sense of relief from reports that the Collection from direct taxes rose by 10.67 per cent to Rs 6.12 lakh crore in the first 11 months of the current financial year in line with the revised Budget projections. Meanwhile, some traders remained on the sidelines and refrained from any buying activity ahead of industrial production for January and consumer price index for February scheduled to be announced on Thursday. Besides, developments in the ongoing session of Parliament will be closely watched.

Earlier, the benchmark got off to a pessimistic start following the Asian peers as strong U.S. jobs data increased chances that the Federal Reserve will raise interest rates sooner. Thereafter, nifty traded in a small range near its crucial 8,800 mark till early afternoon trade, but the selling pressure accentuated in the late afternoon trades as investors took to across the board risk aversion after European markets made an awful start with CAC, DAX and FTSE  were trading with a cut of over half a percent in early deals. The selling was brutal and the index closed with loss of 181 points, dragging it well below the crucial 8,800 level. Barring Pharma, all other NSE sectoral indices ended in the red. Among them, Bank Nifty fell the most by 3.05 percent, followed by CNX Realty 2.80 per cent, CNX Finance 2.72 per cent and CNX Metal 2.44 per cent, while CNX Pharma was up 0.35 per cent.

The top gainers from the F&O segment were Jindal Steel & Power, UPL and Hindustan Unilever. On the other hand, the top losers were Adani Power, Reliance Communications and Jaiprakash Power Ventures. In the index options segment for February series, maximum OI continues to be seen in the 9000-9100 calls and 8500-8400 puts indicating the expected trading range. Meanwhile, India VIX - the gauge of underlying volatility in the market - has risen in today's session, which shows that traders are buying more options contracts as insurance against declines in the market.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 9.52% and reached 15.81. The 50-share CNX Nifty was down by 181.00 points or 2.03% to settle at 8,756.75.  Nifty March 2015 futures closed at 8784.85 on Monday at a premium of 28.10 points over spot closing of 8756.75, while Nifty April 2015 futures ended at 8852.00 at a premium of 95.25 points over spot closing. Nifty March futures saw contraction of 1.06 million (mn) units, taking the total outstanding open interest (OI) to 25.01 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 1.40 points at 291.75 compared with spot closing of 290.35. The number of contracts traded were 29,521.

ICICI Bank March 2015 futures traded at a premium of 2.00 points at 334.70 compared with spot closing of 332.70. The number of contracts traded were 20,839.

HDFC Bank March 2015 futures traded at a premium of 11.10 points at 1069.10 compared with spot closing of 1058.00. The number of contracts traded were 22,279.

Reliance Industries March 2015 futures traded at a premium of 6.85 points at 872.25 compared with spot closing of 865.40. The number of contracts traded were 21,396.

Axis Bank March 2015 futures traded at a premium of 4.90 points at 594.90 compared with spot closing of 590.00. The number of contracts traded were 30,474.

Among Nifty calls, 9000 SP from the March month expiry was the most active call with an addition of 1.07 million open interests. Among Nifty puts, 8800 SP from the March month expiry was the most active put with a contraction of 0.80 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.39 mn) and that for Puts was at 8,500 SP (4.69 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8851.88--- Pivot Point 8796.17--- Support --- 8701.03.

The Nifty Put Call Ratio (PCR) finally stood at 1.01 for March month contract. The top five scrips with highest PCR on OI were Ranbaxy (1), Siemens (0.97), HDFC (0.90), Grasim (0.87) and Sun TV (0.87). 

Among most active underlying, State Bank of India  witnessed a contraction of 2.78 million of Open Interest in the March month futures contract, followed by Axis Bank witnessing an addition of 0.10 million of Open Interest in the March month contract; Larsen & Toubro witnessed a contraction of 0.02 million of Open Interest in the March month contract, ICICI Bank witnessed a contraction of 0.24 million of Open Interest in the March month contract and Infosys witnessed a contraction of 0.24 million of Open Interest in the March month's future contract.