Nifty prolongs downtrend for the fifth consecutive session

CNX Nifty ended lower for the fifth-straight trading session amid volatile trade, weighed down by bank shares while caution prevailed ahead of expiry of March derivative contracts on Thursday. On the global front, Asian stocks settled mixed as negative impact from the weaker-than-expected China's HSBC flash manufacturing purchasing managers' index (PMI) subsided. Moreover, European stocks opened on a mixed note as Investors awaited PMI data for euro zone countries including Germany and France.

Back home, Indian equity benchmark had made a cautious start tracking global cues. In the first half, market traded in positive territory as sentiments got boost with the Asian Development Bank’s (ADB’s) latest Outlook report, saying that developing Asia, which groups 45 countries in Asia-Pacific, is set to grow 6.3 per cent this year and the next, the same pace as in 2014. India and most Southeast Asian economies will lead the way, offsetting slowing growth in China. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 417 crore on March 23, 2015. However, in the late afternoon session, market pared all its early gains and slipped into red on account of selling in Banking, Auto and IT stocks. However, the selling was offset by buying in Pharma, Energy and Media stocks, which led the market to close on a flat note with a negative bias.

The top gainers from the F&O segment were Hexaware, Lupin and Strides Arcolab. On the other hand, the top losers were MindTree, Arvind and Jubilant Foodworks. In the index options segment, maximum OI continues to be seen in the 9000-8800 calls and 8500-8400 puts indicating the expected trading range.  Meanwhile, India VIX - the gauge of underlying volatility in the market - has declined in today's session, which indicates that traders have slowdown buying options contracts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 4.18% and reached 13.67. The 50-share CNX Nifty was down by 7.95 points or 0.09% to settle at 8,542.95. Nifty March 2015 futures closed at 8573.85 on Tuesday at a premium of 30.90 points over spot closing of 8542.95, while Nifty April 2015 futures ended at 8648.10 at a premium of 105.15 points over spot closing. Nifty March futures saw contraction of 5.09 million (mn) units, taking the total outstanding open interest (OI) to 16.89 million (mn) units. The near month derivatives contract will expire on March 26, 2015.

From the most active contracts, State Bank of India March 2015 futures traded at a premium of 0.15 points at 271.35 compared with spot closing of 271.20. The number of contracts traded were 41,263.

ICICI Bank March 2015 futures traded at a premium of 1.80 points at 313.30 compared with spot closing of 311.50. The number of contracts traded were 36,152.

HDFC Bank March 2015 futures traded at a premium of 5.05 points at 1043.00 compared with spot closing of 1037.95. The number of contracts traded were 66,342.

Reliance Industries March 2015 futures traded at a premium of 1.85 points at 850.75 compared with spot closing of 848.90. The number of contracts traded were 43,959.

Tata Steel March 2015 futures traded at a premium of 1.55 points at 328.55 compared with spot closing of 327.00. The number of contracts traded were 29,672.

Among Nifty calls, 8600 SP from the March month expiry was the most active call with a contraction of 0.55 million open interests. Among Nifty puts, 8600 SP from the March month expiry was the most active put with an addition of 0.26 million open interests. The maximum OI outstanding for Calls was at 9000 SP (4.35 mn) and that for Puts was at 8,500 SP (5.85 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8509.95--- Pivot Point 8568.85--- Support --- 8509.95.

The Nifty Put Call Ratio (PCR) finally stood at 0.92 for March month contract. The top five scrips with highest PCR on OI were Oracle Financial Services Software (4), Bharti Airtel (1.11), Lupin (1.11), Dr. Reddy's Laboratories (1.06) and Sun Pharma (1.02). 

Among most active underlying, HDFC Bank witnessed a contraction of 11.68 million of Open Interest in the March month futures contract, followed by State Bank of India witnessing a contraction of 19.27 million of Open Interest in the March month contract; ICICI Bank witnessed a contraction of 16.33 million of Open Interest in the March month contract, Axis Bank witnessed a contraction of 8.97 million of Open Interest in the March month contract and Infosys witnessed a contraction of 1.83 million of Open Interest in the March month's future contract.