Nifty skids lower for second day in a row; ends below 8750 level

The fifty stock index -- Nifty -- extended its downfall for second straight day and finished the choppy day of trade with IT and healthcare stocks contributing the most to the decline on the back of lacklustre US economic data for the month of March. Besides, expectations of sluggish revenue growth during the fourth quarter from TCS also weighed on sentiment. On the global front, Asian stock indices ended mostly higher on Thursdays, as rising oil prices boosted energy and mining shares in the region. Traders also took comfort with Australia reporting that 37,700 jobs were added month-on-month in March, more than double the 15,000 expected. However, European stock markets opened mostly lower in early deals as investors awaited a fresh batch of economic data out of the U.S. and as spirits maker Diageo (DEO) slumped on disappointing third-quarter earnings.

Back home, the Indian equity benchmark made a positive start buoyed by a firm trend in other Asian markets. Some support also came with Prime Minister Narendra Modi, in the last leg of 3-nation tour in Canada, saying that there is an atmosphere of trust in India and there is one solution to all the problems and that is development. However, the Index later pared all its early gains and slipped into red in late morning session on absence of positive triggers which could take the markets higher and profit booking in frontline line blue-chip stocks ahead of the start of earnings season. Sentiments remained dampened as India slipped six places to rank 89th on a global Networked Readiness Index, showing a 'widespread' weakness in its potential to leverage information and communications technologies for social and economic gains. However, the index pared some of its losses in the afternoon session as buying appeared in financials coupled with strength in oil and gas majors as global crude oil futures continued their upward trajectory, but weak trade in European counterparts extended nervousness in the market and the index once again fell towards low level. Traders were seen piling positions in Oil & Gas and PSU stocks, while sharp selling was witnessed in Realty, Capital Goods and Consumer Durables sector stocks. Finally, Nifty ended the session below its crucial 7,750 mark with a cut of half a percent.

The top gainers from the F&O segment were Aurobindo Pharma, Cairn India and Oil & Natural Gas Corporation. On the other hand, the top losers were Jaiprakash Power Ventures, HDIL and Indiabulls Real Estate. 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 8700, 8800 and 9100 Call strikes saw addition of 12.01, 5.18 and 2.58 lakh shares, respectively. On the other hand, 8900, 8800 and 8700 Put strikes saw a contraction of 1.10, 10.60 and 2.90 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 2.26% and reached 14.95. The 50-share CNX Nifty was down by 43.50 points or 0.50% to settle at 8,706.70.  Nifty April 2015 futures closed at 8726.15 on Thursday at a premium of 19.45 points over spot closing of 8706.70, while Nifty May 2015 futures ended at 8776.90 at a premium of 70.20 points over spot closing. Nifty April futures saw contraction of 0.05 million (mn) units, taking the total outstanding open interest (OI) to 19.35 million (mn) units. The near month derivatives contract will expire on April 30, 2015.

From the most active contracts, Axis Bank April 2015 futures traded at a premium of 2.60 points at 553.40 compared with spot closing of 550.80. The number of contracts traded were 35,433.

Reliance Industries April 2015 futures traded at a premium of 3.70 points at 932.05 compared with spot closing of 928.35. The number of contracts traded were 33,976.

Aurobindo Pharma April 2015 futures traded at a premium of 2.50 points at 1420.35 compared with spot closing of 1417.85. The number of contracts traded were 30,743.

State Bank of India April 2015 futures traded at a premium of 0.05 points at 292.45 compared with spot closing of 292.40. The number of contracts traded were 29,381.

IndusInd Bank April 2015 futures traded at a premium of 4.15 points at 938.60 compared with spot closing of 934.45. The number of contracts traded were 24,224.Among Nifty calls, 8800 SP from the April month expiry was the most active call with an addition of 0.51 million open interests. Among Nifty puts, 8700 SP from the April month expiry was the most active put with a contraction of 0.29 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.59 mn) and that for Puts was at 8,600 SP (4.67 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8762.58--- Pivot Point 8704.12--- Support --- 8648.23.

The Nifty Put Call Ratio (PCR) finally stood at 1.13 for April month contract. The top five scrips with highest PCR on OI were Cairn (1.44), Bharti Airtel (1.14), HDIL (1.10), Dr. Reddy's Laboratories (1.09) and IDEA (1.02). 

Among most active underlying, Tata Consultancy Services witnessed an addition of 0.15 million of Open Interest in the April month futures contract, followed by IndusInd Bank witnessing an addition of 0.23 million of Open Interest in the April month contract; Reliance Industries witnessed an addition of 0.03 million of Open Interest in the April month contract, State Bank of India witnessed a contraction of 1.79 million of Open Interest in the April month contract and Aurobindo Pharma witnessed an addition of 0.02 million of Open Interest in the April month's future contract.