Nifty prolongs downtrend for fourth consecutive session

The fifty stock index -- Nifty -- extended the sorrow of closing in the red terrain for the fourth consecutive session as the selling pressure gathered greater momentum since sentiments across the globe remained highly discouraging. However, some support came with industry body CII’s statement that India’s economy can grow at 9-10 percent in the medium-term with a multi-pronged economic strategy. On the global front, Asian markets made a mixed closing on Thursday with Chinese market suffering sharp plunge of over 6% after more brokers tightened margin trading requirements for clients and the central bank drained money market liquidity. Further, European shares wrer trading lower on Thursday, as lingering uncertainty over Greece's debt problems pegged back the region's stock markets.

Earlier, the benchmark got off to a boisterous opening as investors opted to buy beaten down but fundamentally strong stocks. However, the bourse failed to capitalize on the early momentum and slipped into negative territory in the late morning session on absence of any positive triggers which could have taken the markets higher and on weak trade in other Asian markets. Sentiments remained dismal on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 934.98 crore on May 27, 2015. Muted corporate earnings coupled with growing prospects that the Federal Reserve may raise interest rates have further dampened the sentiments. The frontline index kept losing steam thereafter and even drifted to the lowest point in the session in mid afternoon trades. Thereafter started the road to recovery for the bourse, which kept slowly but steadily moving towards the neutral line. Some value buying along with short covering helped the index to pare some of its losses, albeit end the session with a cut of 15 points. Traders were seen piling positions in Consumer Durables, IT and TECK stocks, while sharp selling was witnessed in Banking, Metal and Infrastructure sector stocks

The domestic index CNX Nifty finished the May F&O series with a gain of about 137 points or 1.68%.  Many traders rolled over positions in the futures & options (F&O) segment from the May 2015 series to June 2015 series. The top gainers from the F&O segment were Amtek Auto, Arvind and Page Industries. On the other hand, the top losers were Wockhardt, Jindal Steel & Power and Adani Enterprises. Meanwhile, India VIX - the gauge of underlying volatility in the market - has declined in today's session as traders turned cautious ahead of RBI’s bi-monthly policy preview, which is due on June 2, 2015.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility Decreased by 0.87% and reached 17.13. The 50-share CNX Nifty was down by 15.60 points or 0.19% to settle at 8,319.00. Nifty May 2015 futures expired at 8317 on Thursday at a discount of 2 points over spot closing of 8,319.00, while Nifty June 2015 futures ended at 8318.55 at a discount of 0.45 points over spot closing. Nifty June futures saw an addition of 2.80 million (mn) units, taking the total outstanding open interest (OI) to 12.97 million (mn) units. The near month derivatives contract will expire on June 25, 2015.

From the most active contracts, HDFC Bank June 2015 futures traded at a premium of 8.05 points at 1036.8 compared with spot closing of 1,028.75. The number of contracts traded were 41,756.

Axis Bank June 2015 futures traded at a premium of 2.65 points at 579.05 compared with spot closing of 576.40. The number of contracts traded were 32,914.

Reliance Industries June 2015 futures traded at a premium of 4.65 points at 881.25 compared with spot closing of 876.60. The number of contracts traded were 38,717.

Sun Pharmaceuticals Industries June 2015 futures traded at a premium of 4.65 points at 961.65 compared with spot closing of 957.00. The number of contracts traded were 31,344.

Larsen & Toubro June 2015 futures traded at a discount of 3.05 points at 1631.95 compared with spot closing of 1,635.00. The number of contracts traded were 35,517.Among Nifty calls, 8400 SP from the June month expiry was the most active call with an addition of 0.59 million open interests. Among Nifty puts, 8000 SP from the June month expiry was the most active put with an addition of 0.33 million open interests. The maximum OI outstanding for Calls was at 8500 SP (2.94 mn) and that for Puts was at 8,000 SP (3.82 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8365.62 --- Pivot Point 8317.88 --- Support --- 8271.27.

The Nifty Put Call Ratio (PCR) finally stood at 1.11 for June month contract. The top five scrips with highest PCR on OI were Indiabulls Real Estate (7), MindTree (3.17), Rural Electrification Corporation (2.13), India Cements (1.87) and BHEL (1.81). 

Among most active underlying, State Bank of India witnessed an addition of 1.40 million of Open Interest in the June month futures contract, followed by Axis Bank witnessing an addition of 5.50 million of Open Interest in the June month contract; Adani Enterprises witnessed an addition of 1.13 million of Open Interest in the June month contract, Reliance Industries witnessed an addition of 5.06 million of Open Interest in the June month contract and HDFC Bank witnessed an addition of 4.34 million of Open Interest in the June month's future contract.