Nifty makes triple digit losses; closes below 8,350 level

The domestic index CNX Nifty finally finished its March series below its crucial 8,350 level as global cues remained subdued, moreover the index performed choppy throughout the series and closed with a cut of about 341 points or 3.93 percent compared to last series.

Moreover, today the index fell more than 2 percent, its biggest single-day drop in two months, as foreign investors trimmed positions in blue chips on news that Saudi Arabia launched air strikes in Yemen. Investors were also cautious as they rolled over their positions from the near term March series to April series in the futures and options segment. On global front, Asian markets closed mostly in red as risk appetite took a knock on news that Saudi Arabia and its Gulf Arab allies had launched air strikes in Yemen against Houthi fighters who have tightened their grip on the southern city of Aden. Moreover, European stock markets opened lower in early deals on Thursday, echoing weakness in U.S. and Asian markets.

Earlier, the index got off to a somber opening, extending its downtrend for the seventh straight session on sustained selling by funds and retail investors amid a weak global trend. The global cues were putting pressure, while there are rate hike worries from the US Fed, the boil in crude is working as double whammy for the Indian markets. Brent crude surged by around 6 per cent after Saudi Arabia and its Gulf Arab allies began a military operation in Yemen. Further, the weakness in rupee too was weighing on the sentiments slumping on month-end dollar demand from banks and importers. Thereafter, nifty traded in a small range near its crucial 8,450 mark till early afternoon trades, but the selling pressure accentuated in the late afternoon as investors took to across the board selling after European markets made an awful start with CAC, DAX and FTSE trading with a cut of over half a percent in early deals. Market participants also remained cautious ahead of the derivatives expiry at the end of the session. The selling was brutal and the index closed with a loss of 188.65 points, dragging it below the crucial 8,350 level. All the sectoral indices on the NSE settled in the negative territory with CNX Finance losing the most, ending with a loss of over three percent followed by CNX PSU Bank down by 3.12% and CNX IT down by 2.65%.

Many traders rolled over positions in the futures & options (F&O) segment from the March 2015 series to April 2015 series. Sectorally, capital goods, media and pharma stocks were witnessing high rollover of positions while stocks from the power, telecom and financial space were witnessing relatively low rolls into the April series.  In the index options segment for April series, maximum OI continues to be seen in the 9000-8800 calls and 8100-8300 puts indicating the expected trading range.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 15.37% and reached 15.16. The 50-share CNX Nifty was down by 188.65 points or 2.21% to settle at 8,342.15. Nifty April 2015 futures closed at 8455.75 on Thursday at a premium of 113.60 points over spot closing of 8342.15, while Nifty May 2015 futures ended at 8513.70 at a premium of 171.55 points over spot closing. Nifty April futures saw an addition of 7.29 million (mn) units, taking the total outstanding open interest (OI) to 21.83 million (mn) units. The near month derivatives contract will expire on April 30, 2015.

From the most active contracts, State Bank of India April 2015 futures traded at a premium of 1.45 points at 259.60 compared with spot closing of 258.15. The number of contracts traded were 45,814.

ICICI Bank April 2015 futures traded at a discount of 1.40 points at 311.05 compared with spot closing of 312.45. The number of contracts traded were 39,220.

HDFC Bank April 2015 futures traded at a premium of 8.35 points at 1026.25 compared with spot closing of 1017.90. The number of contracts traded were 61,304.

Reliance Industries April 2015 futures traded at a premium of 8.60 points at 839.60 compared with spot closing of 831.00. The number of contracts traded were 53,371.

Axis Bank April 2015 futures traded at a premium of 4.40 points at 549.90 compared with spot closing of 545.50. The number of contracts traded were 40,175Among Nifty calls, 8600 SP from the April month expiry was the most active call with an addition of 1.42 million open interests. Among Nifty puts, 8400 SP from the April month expiry was the most active put with an addition of 0.97 million open interests. The maximum OI outstanding for Calls was at 9000 SP (2.58 mn) and that for Puts was at 8,200 SP (2.37 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8278.52 --- Pivot Point 8388.98 --- Support --- 8278.52.

The Nifty Put Call Ratio (PCR) finally stood at 0.98 for April month contract. The top five scrips with highest PCR on OI were India Cements (2.48), CESC (2.09), Eicher Motors (2), Ranbaxy (1.77) and Dr. Reddy's Laboratories (1.21). 

Among most active underlying, State Bank of India witnessed an addition of 30.52 million of Open Interest in the April month futures contract, followed by ICICI Bank witnessing an addition of 23.29 million of Open Interest in the April month contract; HDFC Bank witnessed an addition of 7.91 million of Open Interest in the April month contract, Axis Bank witnessed an addition of 7.82 million of Open Interest in the April month contract and Larsen & Toubro witnessed an addition of 2.69 million of Open Interest in the April month's future contract.