Bearish trend continues; Nifty ends below 8,050 mark

Indian benchmark Nifty started the new week on a disturbing note as worries about below-par monsoon rains and fading rate cut hopes continued to keep foreign investors at bay. Moreover, the investors remained concerned about Assocham’s  latest assessment that in the face of slow global demand for merchandise, India’s exports in the current financial year are likely to stay flat or may even move backward of $ 310 billion, the figure achieved in 2014-15. On the global front, Asian markets closed mostly in red on Monday as investors digested mixed economic data out of China and Japan and pondered over when the U.S. Federal Reserve will raise interest rates. Further, European stocks were trading lower in early trading after selling off sharply last week on worries about Greece's future in the euro zone and a spike in bond yields.

Back home, after getting a cautious but positive start, the index failed to capitalize the momentum and slipped into negative territory on absence of any positive triggers and sustained selling in frontline line blue-chip stocks. Sentiments remained dismal on the report that foreign investors have started to take money off the Indian markets and the trend is likely to continue as other markets such as Korea and Taiwan have become more attractive. Also, global credit rating agency Moody’s said that below-normal rains would be credit negative for India’s ratings as it would lower farm output and stoke food prices. Afterword, nifty traded in a small range near its crucial 8,060 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. Besides, investors also remained cautious ahead of CAD data due later today while the ongoing Greek debt crises and decline in the Rupee also weighed on sentiment. All the sectoral indices on the NSE settled in the negative territory with CNX Media losing the most, ending with a loss of over two and half percent followed by CNX PSU Bank down by 2 % and CNX Energy down by 1.36%.

The top gainers from the F&O segment were DLF, Apollo Tyres and Reliance Power. On the other hand, the top losers were Sun TV Network, Adani Enterprises and India Cements. In the index options segment, maximum OI was being seen in the 8500-8400 calls and 8000-7900 puts. In today's session, while the traders preferred to exit 8400 put, heavy buildup was seen in the 7800 put. On the other hand, traders exited from 8600 Call, while 8300 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 4.40% and reached 18.88. The 50-share CNX Nifty was down by 70.55 points or 0.87% to settle at 8,044.15. Nifty June 2015 futures closed at 8044.20 on Monday at a premium of 0.05 points over spot closing of 8,044.15, while Nifty July 2015 futures ended at 8079.00 at a premium of 34.85 points over spot closing. Nifty June futures saw contraction of 0.08 million (mn) units, taking the total outstanding open interest (OI) to 16.24 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 0.55 points at 255.40 compared with spot closing of 254.85. The number of contracts traded were 20,540.

ICICI Bank June 2015 futures traded at a premium of 1.75 points at 284.25 compared with spot closing of 282.50. The number of contracts traded were 15,957.

Tata Motors June 2015 futures traded at a premium of 2.30 points at 437.40 compared with spot closing of 435.10. The number of contracts traded were 17,682.

Reliance Industries June 2015 futures traded at a premium of 4.30 points at 889.55 compared with spot closing of 885.25. The number of contracts traded were 22,185.

Axis Bank June 2015 futures traded at a premium of 0.20 points at 552.95 compared with spot closing of 552.75. The number of contracts traded were 21,233.Among Nifty calls, 8300 SP from the June month expiry was the most active call with an addition of 0.79 million open interests. Among Nifty puts, 8000 SP from the June month expiry was the most active put with a contraction of 0.10 million open interests. The maximum OI outstanding for Calls was at 8300 SP (4.32 mn) and that for Puts was at 8,000 SP (4.89 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8106.58--- Pivot Point 8068.57--- Support --- 8006.13.

The Nifty Put Call Ratio (PCR) finally stood at 0.89 for June month contract. The top five scrips with highest PCR on OI were Bosch (2), MindTree (1.75), JSW Steel (1.06), BHEL (1.02) and REC (1.01). 

Among most active underlying, State Bank of India witnessed an addition of 3.19 million of Open Interest in the June month futures contract, followed by Reliance Industries witnessing an addition of 0.67 million of Open Interest in the June month contract; ICICI Bank witnessed a contraction of 0.09 million of Open Interest in the June month contract, Axis Bank witnessed an addition of 0.57 million of Open Interest in the June month contract and Larsen & Toubro witnessed an addition of 0.07 million of Open Interest in the June month's future contract.