Nifty witnesses bloodbath;all components end in red

NSE benchmark Nifty suffered sharp cuts on Wednesday after a day of consolidation and the index witnessing cut of around 2 percent slipped below the crucial psychological level of 8500. There was one way fall in the market after a gap-down start, following the slump in the regional indices under effect of the blood-bath in the Chinese market coupled with Greece uncertainty. Though, the Greek Prime Minister Alexis Tsipras pleaded in the European Parliament on Wednesday for a fair deal to keep his country in the euro zone but reports emerged that Europe’s leaders are finally ready to show Alexis Tsipras the exit.

Markets were unable to get any respite till last with no supportive cues in sight, there was red across the street and all the Nifty components ended in red. The domestic traders were also concerned over the corporate profit growth, with the first quarter earnings kick starting tomorrow with TCS numbers. The rating agency Crisil expects India Inc results for the quarter ended June 2015, to disappoint as soft commodity prices, weak growth in investment-linked sectors and subdued rural demand restrict earnings. All the sectors suffered considerable losses. The sector which got hammered most was metals after commodities in global markets suffered their worst rout in seven months as a steep selloff in China’s stock reflecting broader economic weakness, even after the Chinese government announced new measures including allowing insurance companies to invest more assets in stocks and a scheme to buy the shares of smaller companies. Investors rushed out of commodity markets in response, cutting back holdings of energy, metals and grains.

The lone gainer from the F&O segment was Bharti Airtel. On the other hand, the top losers were, Vedanta, Yes Bank and Tata Motors. In the index options segment, maximum OI was being seen in the 8500-8800 calls and 7900-8200 puts. In today's session, while the traders preferred to exit 8500 puts, some buildup was seen in the 7900 put. On the other hand, traders exited from 8700 Call, while 8400 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 9.09% and reached 17.79. The 50-share CNX Nifty was down by 147.75 points or 1.74% to settle at 8,363.05. Nifty July 2015 futures closed at 8378.00 on Wednesday at a premium of 14.95 points over spot closing of 8,363.05, while Nifty August 2015 futures ended at 8418.70 at a primium of 55.65 points over spot closing. Nifty July futures saw contraction of 0.40 million (mn) units, taking the total outstanding open interest (OI) to 18.18 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 1.90 points at 268.60 compared with spot closing of 266.70. The number of contracts traded were 24,175.

ICICI Bank July 2015 futures traded at a premium of 1.85 points at 309.05 compared with spot closing of 307.20. The number of contracts traded were 22,527.

Tata Motors July 2015 futures were trading flat compared with spot closing of 404.30. The number of contracts traded were 45,564.

Reliance July 2015 futures traded at a premium of 7.00 points at 1000.20 compared with spot closing of 993.20. The number of contracts traded were 39,335.

Tata Steel July 2015 futures traded at a discount of 6.80 points at 275.20 compared with spot closing of 282.00. The number of contracts traded were 21,428.

Among Nifty calls, 8400 SP from the July month expiry was the most active call with an addition of 0.76 million open interests.  Among Nifty puts, 8500 SP from the July month expiry was the most active put with a contraction of 0.65 million open interests.  The maximum OI outstanding for Calls was at 8500 SP (4.95 mn) and that for Puts was at 8000 SP (5.30mn).  The respective Support and Resistance levels of Nifty are: Resistance 8433.23 --- Pivot Point 8387.32 --- Support --- 8317.13.

The Nifty Put Call Ratio (PCR) finally stood at 1.33 for July month contract.  The top five scrips with highest PCR on OI were Dr. Reddys Laboratories (1.54), BOSCH (1.11), Just Dial (1.06), JSW Steel (1.03) and Bajaj Auto (0.97).

Among most active underlying, Yes Bank witnessed an addition of 1.57 million of Open Interest in the July month futures contract, followed by Reliance Industries witnessing an addition of 0.23 million of Open Interest in the July month contract; Tata Motors witnessed an addition of 0.93 million of Open Interest in the July month contract, L&T witnessed a contraction of 0.99 million of Open Interest in the July month contract and TCS witnessed a contraction of 0.27 units of Open Interest in the July month's future contract.