Nifty ends seven-day winning streak; plunges below 8800 level

CNX Nifty ended lower as exporters such as Infosys fell on worries that strength in the rupee after inflation data may persist and hurt revenues, while private banks pared early gains on profit taking in late trades. On the global front, Asian markets made mostly a negative close as China reported its economy grew at a 7.0 percent annual rate in January-March, the slowest pace in six years. However, European stocks edged higher in early trade on Wednesday ahead of the latest policy announcement from the European Central Bank.

Back home, the Nifty made a positive start as the consumer price index (CPI) inflation slowed to 5.17% year-on-year in March, compared to 5.37% in February. Some support also came in with the International Monetary Fund (IMF) statement that India will overtake China as the fastest growing emerging economy in 2015-16 by clocking a growth rate of 7.5 percent on the back of recent policy initiatives, pick-up in investments and lower oil prices. Thereafter, the Index pared all its early gains and slipped into red in late morning session on account of sustained selling pressure by funds and speculators.  The index traded near neutral line for most part of the day, lacking any significant upside triggers as investors engaged themselves in few stocks. However, losses remained capped as India's wholesale price index-based inflation (WPI) dropped for the fifth straight month in March to -2.33%, a clear reflection of lower commodity prices that may nudge Reserve Bank of India to cut policy rates. Market traded range bound till late afternoon trade but witnessed a drastic fall in last leg of trade on the back of sudden selling in banking, capital goods, IT and auto stocks. Finally, Nifty ended the session with a loss of massive 83 points.

The top gainers from the F&O segment were Tata Communications, Oriental Bank of Commerce and IDBI Bank. On the other hand, the top losers were Wockhardt, Century Textiles & Industries and Bharat Heavy Electricals. 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.

In the index options segment, maximum OI continues to be seen in the 9000-8800 calls and 8600-8500 puts indicating the expected trading range. In today's session, the 8800, 8900 and 9000 Call strikes saw addition of 6.49, 9.18 and 4.53 lakh shares, respectively. On the other hand, 8500, 8400 and 8200 Put strikes saw a contraction of 4.47, 1.87 and 1.64 lakh shares, respectively on the back of profit booking.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.91% and reached 14.62. The 50-share CNX Nifty was down by 83.80 points or 0.95% to settle at 8,750.20. Nifty April 2015 futures closed at 8786.15 on Wednesday at a premium of 35.95 points over spot closing of 8750.20, while Nifty May 2015 futures ended at 8835.95 at a premium of 85.75 points over spot closing. Nifty April futures saw addition of 0.63 million (mn) units, taking the total outstanding open interest (OI) to 19.40 million (mn) units. The near month derivatives contract will expire on April 30, 2015.

From the most active contracts, Reliance Industries April 2015 futures traded at a premium of 5.70 points at 929.35 compared with spot closing of 923.65. The number of contracts traded were 46,669.

Axis Bank April 2015 futures traded at a premium of 2.95 points at 553.15 compared with spot closing of 550.20. The number of contracts traded were 40,330.

State Bank of India April 2015 futures traded at a premium of 0.40 points at 290.40 compared with spot closing of 290.00. The number of contracts traded were 29,374.

ICICI Bank April 2015 futures traded at a premium of 1.55 points at 316.55 compared with spot closing of 315.00. The number of contracts traded were 23,841.

Yes Bank April 2015 futures traded at a premium of 1.95 points at 847.60 compared with spot closing of 845.65. The number of contracts traded were 22,180.

Among Nifty calls, 8900 SP from the April month expiry was the most active call with an addition of 0.91 million open interests. Among Nifty puts, 8800 SP from the April month expiry was the most active put with a contraction of 0.01 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.69 mn) and that for Puts was at 8,600 SP (4.52 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8822.53 --- Pivot Point 8772.47 --- Support --- 8700.13.

The Nifty Put Call Ratio (PCR) finally stood at 1.22 for April month contract. The top five scrips with highest PCR on OI were Dr. Reddy's Laboratories (1.32), HDIL (1.26), Cairn (1.21), Bharti Airtel (1.11) and MRF (1). 

Among most active underlying, Reliance Industries witnessed an addition of 0.08 million of Open Interest in the April month futures contract, followed by State Bank of India witnessing a contraction of 1.92 million of Open Interest in the April month contract; Axis Bank witnessed an addition of 2.14 million of Open Interest in the April month contract, ICICI Bank witnessed an addition of 0.46 million of Open Interest in the April month contract and Yes Bank witnessed a contraction of 0.07 million of Open Interest in the April month's future contract.