Nifty ends below 8250 level ahead of derivatives expiry

The penultimate day of April series futures and options contract expiry turned out to be a bad session for CNX Nifty as index settle with loss of over half a percent. Continued sales by foreign portfolio investors amid fresh worries on retrospective taxes, and a delay in earnings recovery and land acquisition bill hurt sentiment. On the global front, Asian markets closed mostly in red as weak US data raised questions about the health of the world's top economy, while the dollar edged down as an early interest rate rise looks increasingly unlikely. Moreover, European stock markets were little changed after steep losses on Tuesday, with better-than-expected earnings releases from some major companies limiting further declines.

Back home, the Indian equity benchmark made a negative start on absence of any positive triggers which could have taken the market higher and sustained selling in frontline line blue-chip stocks. Besides, weak trend in Asian stocks coupled with depreciation in rupee value also weighed on the sentiment. The selling pressure accentuated in the late morning trades as investors took to across the board risk aversion. Traders were concerned about the government back-tracking from its resolve to take up the GST bill for consideration on Wednesday, and rescheduling it to next week, with the main opposition party Congress deciding to hold fresh rounds of strategy meeting on their stand.  The key gauge made some attempts to claw back into the green zone in early afternoon trades but profit booking at higher levels dragged the key index once again below neutral line.  Thereafter, the key index failed to show any kind of fervor due to lack of encouraging leads. Sentiments remained subdued as Chief Economic Adviser Arvind Subramanian statement that India is 'a very frustratingly robust democracy' where unleashing “big bang” reforms is not easy given the multiple centres of veto power.  Eventually, Nifty ended the session below its crucial 8,250 mark with a cut of over half a percent.

The market is likely to remain volatile this week with traders rolling over positions in the futures & options (F&O) segment from April to May 2015 series. Coming to F&O market internals, in the index options segment, maximum OI continues to be seen in the 8500-8400 calls and 8300-8200 puts indicating the expected trading range.  The top gainers from the F&O segment were Century Textiles & Industries, TVS Motor and Indiabulls Real Estate. On the other hand, the top losers were Idea Cellular, Godrej Industries and Bharti Airtel.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.01% and reached 17.23. The 50-share CNX Nifty was down by 45.85 points or 0.55% to settle at 8,239.75.

Nifty April 2015 futures closed at 8238.25 on Wednesday at a discount of 1.50 points over spot closing of 8239.75, while Nifty May 2015 futures ended at 8292.20 at a premium of 52.45 points over spot closing. Nifty April futures saw contraction of 3.12 million (mn) units, taking the total outstanding open interest (OI) to 11.02 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 a discount of 1.10 points at 330.20 compared with spot closing of 331.30. The number of contracts traded were 39,821.

Axis Bank April 2015 futures traded at a discount of 4.75 points at 553.80 compared with spot closing of 558.55. The number of contracts traded were 56,928.

Sun Pharmaceutical Industries April 2015 futures traded at a discount of 1.10 points at 938.70 compared with spot closing of 939.80. The number of contracts traded were 41,099.

Reliance Industries April 2015 futures traded at a premium of 3.70 points at 851.90 compared with spot closing of 848.20. The number of contracts traded were 54,785.

HDFC Bank April 2015 futures traded at a premium of 0.40 points at 993.30 compared with spot closing of 992.90. The number of contracts traded were 47,539.

Among Nifty calls, 8300 SP from the April month expiry was the most active call with an addition of 0.84 million open interests. Among Nifty puts, 8200 SP from the April month expiry was the most active put with an addition of 0.54 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.49 mn) and that for Puts was at 8,200 SP (5.70 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8292.23--- Pivot Point 8255.72--- Support --- 8203.23.

The Nifty Put Call Ratio (PCR) finally stood at 0.69 for April month contract. The top five scrips with highest PCR on OI were Mcleod Russel India (1.14), Maruti Suzuki (1.08), MRF (1), Cairn (0.96) and Tata Steel (0.92). 

Among most active underlying, Axis Bank witnessed a contraction of 4.08 million of Open Interest in the April month futures contract, followed by ICICI Bank witnessing a contraction of 9.93 million of Open Interest in the April month contract; Reliance Industries witnessed a contraction of 7.09 million of Open Interest in the April month contract, Maruti Suzuki witnessed a contraction of 0.80 million of Open Interest in the April month contract and HDFC Bank witnessed a contraction of 6.74 million of Open Interest in the April month's future contract.