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

The local benchmark, Nifty continued its southward journey for third consecutive day on Thursday and finished the choppy day of trade with a cut of thirty four points. Sentiments remained dampened on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 354.32 crore on July 08, 2015, On global front, Asian shares reversed early losses to end on a steady note, as a rebound in battered Chinese markets offered a sense of relief to investors worried about broader implications for the global economy.  Moreover, European shares were rallying in early deals on hopes that creditors would work out with Greece to avoid Grexit after Athens presented fresh proposals on Wednesday.

Back home, after making a flat but positive start, Nifty traded near neutral line for most part of the day’s trade, lacking any significant upside triggers as investors remained cautious ahead of the corporate results season, which will be starting from today. The April-June earnings season is expected to start on a muted note with earnings of IT companies such as TCS, which is India's biggest software services exporter, expected to be hurt by client-led delays and the dollar's strength. Besides, exporters were also weighed down by the ongoing volatility in global markets amid the stocks slump in China and Greece's debt crisis. The selling pressure in domestic market intensified in the late afternoon trades despite the sharp rally in European markets on the report that the country has experienced decline in rainfall in July and almost all regions except the north-west have started registering negative precipitation. According to the India Meteorological Department, (IMD) from June 1 until July 8, the country has registered an overall deficit rainfall of four per cent. However, the downfall was arrested by Capital Goods shares that were rallying ahead of the announcement of Index of Industrial Production (IIP) data for the month of May, which will be unveiled tomorrow. Some support also came with Paris-based think tank OECD’s statement that India is seeing ‘stable growth momentum’ even as economic activities are expected to slow down in China, the US and many other major economies. Traders were seen piling position in Capital Goods, Power and Banking stocks while selling was witnessed in Oil & Gas, IT and TECK sector stocks.

The top gainers from the F&O segment were Allahabad Bank, Bharat Heavy Electricals and LIC Housing Finance. On the other hand, the top losers were Bharat Petroleum Corporation, Vedanta and Bajaj Finance. In the index options segment, maximum OI was being seen in the 8400-8600 calls and 8000-7800 puts. In today's session, while the traders preferred to exit 8000 put, heavy buildup was seen in the 8300 put. On the other hand, traders exited from 9000 Call, while 8400 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.98% and reached 17.43. The 50-share CNX Nifty was down by 34.50 points or 0.41% to settle at 8,328.55. Nifty July 2015 futures closed at 8346.10 on Thursday at a premium of 17.55 points over spot closing of 8,328.55, while Nifty August 2015 futures ended at 8387.10 at a primium of 58.55 points over spot closing. Nifty July futures saw contraction of 0.32 million (mn) units, taking the total outstanding open interest (OI) to 17.86 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 1.00 points at 269.00 compared with spot closing of 268.00. The number of contracts traded were 17,870.

Tata Motors July 2015 futures traded at a premium of 0.10 points at 398.35 compared with spot closing of 398.25. The number of contracts traded were 26,068.

Reliance July 2015 futures traded at a premium of 2.90 points at 992.90 compared with spot closing of 990.00. The number of contracts traded were 25,523.

HDFC Bank July 2015 futures traded at a premium of 2.35 points at 1076.25 compared with spot closing of 1,073.90. The number of contracts traded were 15,941.

Axis Bank July 2015 futures traded at a premium of 1.85 points at 574.5 compared with spot closing of 572.65. The number of contracts traded were 14,981.

Among Nifty calls, 8500 SP from the July month expiry was the most active call with an addition of 0.31 million open interests.  Among Nifty puts, 8300 SP from the July month expiry was the most active put with an addition of 0.23 million open interests.  The maximum OI outstanding for Calls was at 8500 SP (4.89 mn) and that for Puts was at 7900 SP (5.43 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8378.23 --- Pivot Point 8350.62 --- Support --- 8300.93.

The Nifty Put Call Ratio (PCR) finally stood at 1.23 for July month contract.  The top five scrips with highest PCR on OI were Dr. Reddys Laboratories (1.63), Bajaj-Auto (0.96), JSW Steel (0.96), L&T (0.93) and Hindustan Petroleum Corporation (0.92).

Among most active underlying, Tata Consultancy Services witnessed an addition of 0.20 million of Open Interest in the July month futures contract, followed by Yes Bank witnessing an addition of 0.43 million of Open Interest in the July month contract; Reliance Industries witnessed a contraction of 0.03 million of Open Interest in the Julymonth contract, Larsen & Toubro witnessed a contraction of 0.06 million of Open Interest in the July month contract and BPCL witnessed an addition of 0.59 units of Open Interest in the July month's future contract.