Nifty skids lower for second day in a row; ends below 8350 level

The fifty stock index -- Nifty -- continued its southward journey for second consecutive day on Monday and finished the choppy day of trade with a cut of over half a percent as Greece looked set to default on its debt repayment this week, sparking concerns about foreign selling in emerging markets. The Foreign portfolio investors have already sold shares worth Rs 2,760 crore in June so far, adding to sales worth Rs 5,768 crore in the previous month. The weakness in rupee too has been weighing on the sentiments, the domestic currency has extended losses for the fifth consecutive day on heavy dollar demand. On the global front, Asian stock markets closed in red, with Chinese shares extending losses from the past two weeks despite a surprise interest rate cut. Further, European stocks were trading lower in their early trade as investors fear Greece could be heading for a euro zone exit.

Back home, after getting gap down start, nifty continued its sluggish run for most part of the day as fears intensified over Greece likely defaulting on its debt, triggering a selling pressure across Asian markets. Greece closed its banks and imposed capital controls on Sunday to check the growing strains on its crippled financial system. The sentiment also remained dampened with the Finance Secretary Rajiv Mehrishi that the economic crisis in Greece may trigger capital outflows from India and the government is consulting Reserve Bank to deal with the situation. Further, shares of companies having significant revenue exposure to the eurozone fell sharply as chances of Greece exiting the Euro zone increases with Greece set to default on its debt payment. However, mid-way buying helped recovering almost two-third of lost grounds to close the day with 62.70 points or 0.75 per cent down at 8,318.40. Some support also came with the Indian Meteorological Department (IMD) statement that the South-west Monsoon has covered the entire length and breadth of the country, way ahead of schedule in a year that saw a forecast of deficit rainfall for India.

The top gainers from the F&O segment were SRF, L&T Finance Holdings and Indraprastha Gas. On the other hand, the top losers were Tech Mahindra, Mcleod Russel India and Jain Irrigation Systems. In the index options segment, maximum OI was being seen in the 8600-8400 calls and 8000-7800 puts. In today's session, while the traders preferred to exit 8400 put, heavy buildup was seen in the 8000 put. On the other hand, traders exited from 8800 Call, while 8600 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 9.75% and reached 17.29. The 50-share CNX Nifty was down by 62.70 points or 0.75% to settle at 8,318.40.  Nifty July 2015 futures closed at 8319.15 on Monday at a premium of 0.75 points over spot closing of 8,318.40, while Nifty August 2015 futures ended at 8354.15 at a premium of 35.75 points over spot closing. Nifty July futures saw addition of 1.37 million (mn) units, taking the total outstanding open interest (OI) to 15.20 million (mn) units. The near month derivatives contract will expire on July 30, 2015.

From the most active contracts, State Bank of India July 2015 futures traded at premium of 0.30 points at 260.60 compared with spot closing of 260.30. The number of contracts traded were 26,848.

ICICI Bank July 2015 futures traded at a premium of 0.20 points at 312.35 compared with spot closing of 312.15. The number of contracts traded were 23,805.

Reliance Industries July 2015 futures traded at a premium of 5.20 points at 995.50 compared with spot closing of 990.30. The number of contracts traded were 35,114.

Tata Motors July 2015 futures traded at a discount of 0.50 points at 429.50 compared with spot closing of 430.00. The number of contracts traded were 15,438.

HDFC Bank July 2015 futures traded at a discount of 3.25 points at 1052.25 compared with spot closing of 1055.50. The number of contracts traded were 25,243.

Among Nifty calls, 8500 SP from the July month expiry was the most active call with an addition of 0.04 million open interests.  Among Nifty puts, 8000 SP from the July month expiry was the most active put with an addition of 1.20 million open interests.  The maximum OI outstanding for Calls was at 8500 SP (3.13 mn) and that for Puts was at 7900 SP (5.85 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8366.68 --- Pivot Point 8281.17 --- Support --- 8232.88.

The Nifty Put Call Ratio (PCR) finally stood at 1.43 for July month contract.  The top five scrips with highest PCR on OI were UBL (1.74), Divis Lab (1.50), Just Dial (1.33), ACC (1.19) and Grasim (1.19).

Among most active underlying, Reliance Industries witnessed an addition of 0.19 million of Open Interest in the July month futures contract, followed by State Bank of India witnessing an addition of 0.64 million of Open Interest in the July month contract; Tech Mahindra witnessed an addition of 1.64 million of Open Interest in the Julymonth contract, Larson & Toubro witnessed an addition of 0.21 million of Open Interest in the July month contract and ICICI Bank witnessed an addition of 2.49 units of Open Interest in the July month's future contract.