Nifty ends below 8700 level on caution ahead of US Fed Meet Outcome

CNX Nifty ended lower on sustained weakness in select index heavyweight stocks like NTPC and ITC and information technology shares among others. The sentiments remained downbeat for most part of the day as IMF chief Christine Lagarde said that a possible interest rate hike by the US Federal Reserve could pose risks to market stability in emerging economies, including India, even if it is well managed by central banks. On the global front, Asian markets mostly advanced as investors await the end of the Federal Reserve's policy meeting later in the day, hoping for clues about its plans for interest rates. Moreover, most of the European markets made a positive opening in the early deals on Wednesday.

Back home, the Indian equity benchmark made a negative start on absence of positive triggers which could have taken the markets higher and profit booking in frontline line blue-chip stocks ahead of the Federal Reserve policy statement due later today. Sentiment on the street weakened further after Business Outlook survey, conducted by global financial information provider Markit, said that corporates in India are not too optimistic about production growth in various sectors for the next one year. Traders were unable to get much help from the provisional data released by the stock exchanges that foreign portfolio investors (FPIs) bought shares worth a net Rs 265.52 crore yesterday. The selling pressure in domestic markets intensified in late afternoon trades as the Fed is expected to lay the groundwork for its first interest rate hike in nearly a decade. However, some value buying in dying hours helped the index to pare some of its losses and end the session below its crucial 8,700 mark with a cut of 37 points.

The top gainers from the F&O segment were Just Dial, HPCL and Biocon. On the other hand, the top losers were NTPC, BHEL and GMR Infrastructure. In the index options segment, maximum OI continues to be seen in the 9000-8900 calls and 8500-8400 puts indicating the expected trading range. In today's session, some traders exited from 8700, 8800 and 8900 puts on the back of profit booking. On the other hand, 8700, 8800 and 8900 calls strikes saw addition of 3.77, 10.95 and 5.51 lakh shares, respectively.

Most of the sectoral indices on the NSE settled in the positive territory with CNX Media gaining the most, ending with a gain of 1.47 present followed CNX PSU Bank up by 1.11 present and Bank Nifty up by 0.47 present, while CNX IT down 0.86 present, CNX FMCG down 0.71 present and CNX Auto down by 0.67 present remained the losers on NSE sectoral space.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.55% and reached 15.51. The 50-share CNX Nifty was down by 37.40 points or 0.43% to settle at 8,685.90. Nifty March 2015 futures closed at 8704.70 on Wednesday at a premium of 18.80 points over spot closing of 8685.90, while Nifty April 2015 futures ended at 8776.25 at a premium of 90.35 points over spot closing. Nifty March futures saw contraction of 0.74 million (mn) units, taking the total outstanding open interest (OI) to 23.39 million (mn) units. The near month derivatives contract will expire on March 26, 2015.

From the most active contracts, HCL Tech March 2015 futures traded at a discount of 7.75 points at 1998.80 compared with spot closing of 2,006.55. The number of contracts traded were 41,997.

Tech Mahindra March 2015 futures traded at a discount of 6.75 points at 2793.75 compared with spot closing of 2,800.50. The number of contracts traded were 36,399.

Axis Bank March 2015 futures traded at a premium of 2.35 points at 583.60 compared with spot closing of 581.25. The number of contracts traded were 29,873.

Yes Bank March 2015 futures traded at a premium of 1.85 points at 857.55 compared with spot closing of 855.70. The number of contracts traded were 27,527.

State Bank of India March 2015 futures traded at a premium of 0.80 points at 288.10 compared with spot closing of 287.30. The number of contracts traded were 24,257.

Among Nifty calls, 8800 SP from the March month expiry was the most active call with an addition of 1.09 million open interests. Among Nifty puts, 8700 SP from the March 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 (5.62 mn) and that for Puts was at 8,500 SP (5.43 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8734.10 --- Pivot Point 8699.05 --- Support --- 8650.85.

The Nifty Put Call Ratio (PCR) finally stood at 0.93 for March month contract. The top five scrips with highest PCR on OI were Sun TV (1.12), Ranbaxy (1.08), OFSS (1), Sun Pharma (0.91) and Cairn (0.88). 

Among most active underlying, Yes Bank witnessed a contraction of 0.56 million of Open Interest in the March month futures contract, followed by State Bank of India witnessing a contraction of 1.60 million of Open Interest in the March month contract; Tech Mahindra witnessed an addition of 1.57 million of Open Interest in the March month contract, Axis Bank witnessed a contraction of 0.07 million of Open Interest in the March month contract and HCL Technologies witnessed an addition of 2.14 million of Open Interest in the March month's future contract.