Nifty ends below 8,400 mark on weak monsoon forecast

The fifty stock index -- Nifty -- showed a volatile face on Thursday as what started on a promising session ended as a dismal show. The optimism in domestic markets petered out completely by the end of trade and the benchmark even drifted in to the negative territory despite getting off to a gap-up opening. Muted earning numbers, forecast of a below-normal monsoon, depreciating rupee against dollar and fading hopes of a rate cut by the Reserve Bank weighed on sentiments. On the global front, Asian markets were mostly higher on hopes for further economic stimulus. However, European shares gave up early gains after a survey showed growth in Germany's private sector slowed and French business activity barely grew in April.

Back home, the Indian equity benchmark made a positive start buoyed by a firm trend in other Asian markets. Some support also came as Jayant Sinha, minister of state for finance, assured FIIs that the government was committed to a stable tax regime and MAT will not apply to FIIs investing from countries, which have signed double tax avoidance treaty with India. 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. Traders were mainly concerned about Indian Meteorological Department's (IMD) prediction that India is likely to witness a 'below normal' monsoon this season, for a second consecutive year, partly due to the El Nino phenomenon. The index traded near neutral line for most part of the day, lacking any significant upside triggers as investors engaged themselves in few stocks. Traders were seen piling positions in Metal, Consumer Durables and FMCG stocks while selling was witnessed in Capital Goods, Realty and Auto sector stocks. Finally, Nifty ended the session below its crucial 8,400 mark with a loss of 31 points.

The top gainers from the F&O segment were YES Bank, Tata Steel and L&T Finance Holdings. On the other hand, the top losers were CESC, Just Dial and Aditya Birla Nuvo.  In the index options segment, maximum OI continues to be seen in the 8600-8500 calls and 8400-8300 puts indicating the expected trading range. In today's session, the 8400, 8500 and 8700 Call strikes saw addition of 2.07, 7.91 and 3.75 lakh shares, respectively. On the other hand, 8400, 8300 and 8200 Put strikes saw an addition of 2.45, 12.17 and 1.68 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 7.50% and reached 18.50. The 50-share CNX Nifty was down by 31.40 points or 0.37 % to settle at 8,398.30.  Nifty April 2015 futures closed at 8405.35 on Thursday at a premium of 7.05 points over spot closing of 8398.30, while Nifty May 2015 futures ended at 8456.65 at a premium of 58.35 points over spot closing. Nifty April futures saw contraction of 0.12 million (mn) units, taking the total outstanding open interest (OI) to 21.19 million (mn) units. The near month derivatives contract will expire on April 30, 2015.

From the most active contracts, Yes Bank April 2015 futures traded at a premium of 0.20 points at 851.50 compared with spot closing of 851.30. The number of contracts traded were 60,825.

Tata Steel April 2015 futures traded at a premium of 0.25 points at 369.70 compared with spot closing of 369.45. The number of contracts traded were 45,892.

Sun Pharmaceuticals Industry April 2015 futures traded at a premium of 1.95 points at 944.05 compared with spot closing of 942.00. The number of contracts traded were 41,740.

HDFC Bank April 2015 futures traded at a discount of 1.30 points at 1014.80 compared with spot closing of 1013.50. The number of contracts traded were 39,906.

Axis Bank April 2015 futures traded at a premium of 1.40 points at 539.65 compared with spot closing of 538.20. The number of contracts traded were 35,492.

Among Nifty calls, 8500 SP from the April month expiry was the most active call with an addition of 0.64 million open interests. Among Nifty puts, 8400 SP from the April month expiry was the most active put with an addition of 0.07 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.40 mn) and that for Puts was at 8,300 SP (5.27 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8481.55 --- Pivot Point 8421.70 --- Support --- 8338.45.

The Nifty Put Call Ratio (PCR) finally stood at 0.82 for April month contract. The top five scrips with highest PCR on OI were Cairn (1.09), MRF (1.00), Tata Steel (0.97), Century Textiles & Industries (0.97) and YES Bank (0.95). 

Among most active underlying, Yes Bank witnessed a contraction of 1.54 million of Open Interest in the April month futures contract, followed by Infosys witnessing a contraction of 0.14 million of Open Interest in the April month contract; State Bank of India witnessed a contraction of 0.08 million of Open Interest in the April month contract, HDFC Bank witnessed a contraction of 2.10 million of Open Interest in the April month contract and Sun Pharmaceuticals Industries witnessed a contraction of 0.02 million of Open Interest in the April month's future contract.