Nifty prolongs downtrend for third consecutive session

The fifty stock index -- Nifty -- continued its southward journey for third consecutive day on Monday and finished the choppy day of trade with a cut of over a percentage point. Sentiments remained downbeat for most part of the day on back of consistent FII selling, continued worries over retrospective taxes and lower-than-expected January-March earnings so far. On the global front, Asian markets made a mixed closing, though there was big gains in the mainland Chinese market with Shanghai Composite rising over 3% to hit a new 3-years high after fresh weak industrial-profit data added to pressure on policymakers to unveil more stimulus to boost growth. However, European stocks slipped in early trade, with lingering concerns over Greece’s debt situation seen as prompting investors to trade cautiously at the start of a new week.

Back home, the Indian equity benchmark got off to a cautious but positive start and lost some ground in early morning trade on absence of positive triggers and on continued worries about retrospective taxes. Besides, investors remained cautious ahead of central bank meetings this week in the United States and Japan and because of the deadlock in creditors' talks with Greece. Sentiments were weighed down after Commerce and Industry Minister Nirmala Sitaraman highlighted that country failed to achieve its export targets of $340 billion set for 2014-15 due to economic slowdown in many countries across the world and that the markets were yet to fully recover from the financial crisis of 2007-08. Thereafter, nifty traded in a small range near its crucial 8,250 mark till early afternoon trades, but the selling pressure accentuated in the late afternoon as investors took to across the board selling after weak opening in European counterparts. Market participants also remained cautious on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 775.46 crore on April 24, 2015. The selling was brutal and the index closed with a loss of 91 points, dragging it below the crucial 8,250 level. All the sectoral indices on the NSE settled in the negative territory with CNX Realty losing the most, ending with a loss of over four percent followed by CNX Pharma down by 2.47% and CNX PSU Bank down by 2.22%. The markets are likely to be volatile ahead of the upcoming April derivatives expiry on Thursday.

The top gainers from the F&O segment were Maruti Suzuki, Siemens and UPL. On the other hand, the top losers were Wockhardt, United Breweries and Strides Arcolab. 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 8200, 8300 and 8400 Call strikes saw addition of 9.67, 23.47 and 10.03 lakh shares, respectively. On the other hand, 8500, 8400 and 8300 Put strikes saw a contraction of 3.51, 6.53 and 10.32 lakh shares, respectively on the back of profit booking.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.93% and reached 18.73. The 50-share CNX Nifty was down by 91.45 points or 1.10% to settle at 8,213.80.  Nifty April 2015 futures closed at 8223.00 on Monday at a premium of 9.20 points over spot closing of 8213.80, while Nifty May 2015 futures ended at 8280.35 at a premium of 66.55 points over spot closing. Nifty April futures saw addition of 0.42 million (mn) units, taking the total outstanding open interest (OI) to 19.97 million (mn) units. The near month derivatives contract will expire on April 30, 2015.

From the most active contracts, ICICI Bank April 2015 futures traded at par with at with spot closing at 302.30. The number of contracts traded were 52,133.

HDFC Bank April 2015 futures traded at a premium of 0.30 points at 1006.15 compared with spot closing of 1006.45. The number of contracts traded were 51,208.

Maruti Suzuki April 2015 futures traded at a discount of 14.15 points at 3634.25 compared with spot closing of 3648.40. The number of contracts traded were 42,525.

HDFC Bank May 2015 futures traded at a premium of 11.15 points at 1017.60 compared with spot closing of 1006.45. The number of contracts traded were 40,610.

Reliance Industries April 2015 futures traded at a premium of 0.15 points at 875.45 compared with spot closing of 875.30. The number of contracts traded were 38,092.

Among Nifty calls, 8400 SP from the April month expiry was the most active call with an addition of 1.00 million open interests. Among Nifty puts, 8200 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 8500 SP (5.09 mn) and that for Puts was at 8,200 SP (4.77 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8298.05 --- Pivot Point 8250.20 --- Support --- 8165.95.

The Nifty Put Call Ratio (PCR) finally stood at 0.71 for April month contract. The top five scrips with highest PCR on OI were Mcleod Russel India (1.11), Cairn (1.09), MRF (1), Tata Steel (0.92) and Century Textiles & Industries (0.92). 

Among most active underlying, Maruti Suzuki India witnessed an addition of 0.35 million of Open Interest in the April month futures contract, followed by ICICI Bank  witnessing an addition of 0.90 million of Open Interest in the April month contract; Infosys witnessed a contraction of 0.80 million of Open Interest in the April month contract, HDFC Bank witnessed a contraction of 5.13 million of Open Interest in the April month contract and Wockhardt witnessed an addition of 0.07 million of Open Interest in the April month's future contract.