Nifty prolongs downtrend for seventh consecutive session

The fifty stock index -- Nifty -- ended the session at its lowest level in about eight months in absence of fresh positive triggers and weak global markets failed to revive investor sentiment. Further, the sentiments remained dismal on worries China’s potential inclusion in the MSCI Emerging Market index may tactically hurt portfolio flows, while exporters declined on the rupee’s strength. On the global front, Asian markets closed in red on Tuesday, as downbeat inflation data out of China, growing fears of a Greek debt default and the prospects of higher U.S. interest rates spurred a bout of risk aversion. Further, European stocks fell for the sixth consecutive session on Tuesday, led lower by Spain's Amadeus and tracking a fall on the U.S. equity market as investors speculated that the Federal Reserve may raise rates as soon as September.

Indian equity benchmark made a negative start and traded near neutral line for most part of the day in absence of positive triggers which could take the market higher and sustained selling in selected frontline line blue-chip stocks. The sentiments were distrustful on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 749 crore on June 09, 2015. However, a strong rupee coupled with strength in banking stocks after RBI asks banks to take over management of loan defaulters in the view of restructuring the ailing banks has limited the losses. Some support also came with OECD’s report that Indian economy is witnessing “stable growth momentum” and mixed trends are seen in other parts of the world including China and the US. Meanwhile, serious selling was witnessed in second half after Former finance minister P. Chidambaram statement that the present pace of the Indian economy will neither create any jobs nor it will help the country in coming out of poverty. Investors remained cautious on the report that weak monsoon is likely to be credit-negative for India as it is expected to push up food inflation as well as government deficits. Also, IMD has revised its monsoon forecast for 2015 from below normal to deficit. Traders were seen piling position in Consumer Durables, Metal and Power stocks while selling was witnessed in Realty, Auto and IT sectors stocks.

The top gainers from the F&O segment were Biocon, Sun TV and Hindustan Petroleum Corporation. On the other hand, the top losers were Unitech, Apollo Tyres and Ceat. In the index options segment, maximum OI was being seen in the 8200-8400 calls and 8000-7800 puts. In today's session, while the traders preferred to exit 8200 put, heavy buildup was seen in the 7800 put. On the other hand, traders exited from 8800 Call, while 8100 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 4.63% and reached 18.01. The 50-share CNX Nifty was down by 21.75 points or 0.27% to settle at 8,022.40. Nifty June 2015 futures closed at 8030.60 on Tuesday at a premium of 8.20 points over spot closing of 8,022.40, while Nifty July 2015 futures ended at 8059.90 at a premium of 37.50 points over spot closing. Nifty June futures saw an addition of 0.13 million (mn) units, taking the total outstanding open interest (OI) to 16.37 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 0.30 points at 258.30 compared with spot closing of 258.00. The number of contracts traded were 21,838.

ICICI Bank June 2015 futures traded at a premium of 1.10 points at 288.00 compared with spot closing of 286.90. The number of contracts traded were 19,994.

Tata Motors June 2015 futures traded at a premium of 0.60 points at 441.00 compared with spot closing of 440.40. The number of contracts traded were 15,802.

Reliance Industries June 2015 futures traded at a premium of 4.00 points at 887.95 compared with spot closing of 883.95. The number of contracts traded were 18,533.

Axis Bank June 2015 futures traded at a premium of 2.80 points at 559.90 compared with spot closing of 557.10. The number of contracts traded were 20,895.Among Nifty calls, 8200 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 a contraction of 0.16 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.08 mn) and that for Puts was at 8,000 SP (4.56 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8051.32 --- Pivot Point 8028.23 --- Support --- 7999.32.

The Nifty Put Call Ratio (PCR) finally stood at 0.80 for June month contract. The top five scrips with highest PCR on OI were MindTree (1.08), REC (1.07), JSW Steel (1.04), BHEL (0.95) and L&T (0.88). 

Among most active underlying, Bharat Forge witnessed an addition of 0.38 million of Open Interest in the June month futures contract, followed by State Bank of India witnessing a contraction of 0.51 million of Open Interest in the June month contract; ICICI Bank witnessed a contraction of 2.29 million of Open Interest in the June month contract, Axis Bank witnessed a contraction of 0.02 million of Open Interest in the June month contract and Reliance Industries witnessed an addition of 0.47 million of Open Interest in the June month's future contract.