Market trims losses; ends marginally lower amid weakening rupee

The fifty stock index -- Nifty -- ended the volatile day of trade with a marginal cut on Thursday. Investors remained cautious on sustained foreign fund outflows triggered by deficient monsoon forecast, RBI’s cautious stance on economic recovery and rupee slumping to 20-month low. Foreign portfolio investors (FPIs) sold shares worth a net Rs 594.14 crore on June 03, as per provisional data from the stock exchanges. On the global front, Asian markets closed mostly in red, despite the positive cues from Wall Street and on optimism that Greece will finally reach an agreement with its international creditors. Further, European stock markets fell to the lowest level in almost a month as the region’s bonds extended a drop and another round of talks failed to end a Greek debt stalemate.

Back home, after getting a cautious but positive start, nifty showed some strength in morning trades, but the sentiments turned pessimistic in afternoon trades and index start drifting lower, on a report that foreign direct investment (FDI) in India declined by 40 per cent year-on-year to $2.11 billion in March 2015, the lowest in the last four months of 2014-15 fiscal. The Sentiments remained down-beat as weak monsoon forecast rekindled fears of higher inflation thereby dimming the prospects of further rate cuts by the central bank. Also, there was additional pressure of weakness in rupee, which continuing its decline for the third straight day, dropped below the 64 mark, as the American currency firmed up on sustained capital outflows by foreign funds amid appreciation of the dollar against other currencies overseas. However, late short covering in blue-chip stocks along with supportive news report that India’s economic growth is projected to remain “strong and stable” at 7.3 per cent in 2015 ensured that local bourse go home with relatively small losses. Traders were seen piling position in Oil & Gas, Realty and Capital Goods stocks while selling was witnessed in Metal, Auto and Consumer Durables sectors stocks.

The top gainers from the F&O segment were Unitech, Adani Enterprises and Adani Ports. On the other hand, the top losers were Union Bank of India, Eicher Motors and Steel Authority of India. In the index options segment, maximum OI was being seen in the 8500-8400 calls and 8000-8100 puts. In today's session, while the traders preferred to exit 8300 put, heavy buildup was seen in the 8000 put. On the other hand, traders exited from 8700 Call, while 8500 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 3.53% and reached 18.12. The 50-share CNX Nifty was down by 4.45 points or 0.05% to settle at 8,130.65. Nifty June 2015 futures closed at 8141.60 on Thursday at a premium of 10.95 points over spot closing of 8,130.65, while Nifty July 2015 futures ended at 8177.10 at a premium of 46.45 points over spot closing. Nifty June futures saw an addition of 0.23 million (mn) units, taking the total outstanding open interest (OI) to 16.25 million (mn) units. The near month derivatives contract will expire on June 25, 2015.

From the most active contracts, State Bank of India June 2015 futures traded at a premium of 1.40 points at 259.10 compared with spot closing of 257.70. The number of contracts traded were 25,822.

ICICI Bank June 2015 futures traded at a premium of 2.30 points at 291.75 compared with spot closing of 289.45. The number of contracts traded were 22,765.

Reliance Industries June 2015 futures traded at a premium of 0.90 points at 916.70 compared with spot closing of 915.80. The number of contracts traded were 30,263.

Axis Bank June 2015 futures traded at a premium of 1.40 points at 557.65 compared with spot closing of 556.25. The number of contracts traded were 25,670.

Tata Steel June 2015 futures traded at a premium of 1.85 points at 309.00 compared with spot closing of 307.15. The number of contracts traded were 23,814.

Among Nifty calls, 8300 SP from the June month expiry was the most active call with an addition of 0.38 million open interests. Among Nifty puts, 8000 SP from the June month expiry was the most active put with an addition of 0.37 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.86 mn) and that for Puts was at 8,000 SP (4.90 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8174.88--- Pivot Point 8115.82--- Support --- 8071.58.

The Nifty Put Call Ratio (PCR) finally stood at 0.92 for June month contract. The top five scrips with highest PCR on OI were MindTree (1.75), VEDL (1.21), REC (1.13), BHEL (1.01) and Bata India (0.98). 

Among most active underlying, State Bank of India witnessed an addition of 0.14 million of Open Interest in the June month futures contract, followed by Reliance Industries witnessing a contraction of 0.65 million of Open Interest in the June month contract; Eicher Motors witnessed an addition of 0.03 million of Open Interest in the June month contract, ICICI Bank witnessed an addition of 0.04 million of Open Interest in the June month contract and Axis Bank witnessed a contraction of 0.20 million of Open Interest in the June month's future contract.