Nifty ends below 8600 level on some disappointing earnings

CNX Nifty once again lost its momentum and ended lower on Thursday, losing its crucial psychological level of 8600. The trade was extremely choppy with the benchmark index hardly showing any resistance after slipping into red, after Rajya Sabha once again got adjourned today. The upper house had not transacted any business for the second successive day on Wednesday as treasury and opposition benches stuck to their positions, aggressively pressing for the resignation of external affairs minister Sushma Swaraj along with Rajasthan and Madhya Pradesh chief ministers. 

The global cues too remained sluggish and weighed on the sentiments of the domestic markets.The trade was majorly impacted by some weak earnings announcements, Bajaj Auto’s first quarter profit surpassed street expectations boosted by other income but the topline and operating profit missed forecast. The company’s profit grew by 37.2 percent year-on-year to Rs 1,015 crore. But there was sharp drop in the average realization per vehicle, implying that the product mix of the company may have turned poorer. Lupin too was one of the major laggard of the day, falling over 5% after the drugmaker missed Q1 Street estimates, reporting a net profit of Rs 525 crore on sales of Rs 3,074 crore in the June quarter. On sectoral front, the private sector banks suffered most, while some profit booking was also seen in IT and tech stocks.

The top gainers from the F&O segment were Cairn India, Tata Motors and Dr Reddy. On the other hand, the top losers were Bajaj Auto, Lupin and Zee Entertainment.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.57% and reached 15.52. The 50-share CNX Nifty was down by 43.70 points or 0.51% to settle at 8,589.80. Nifty July 2015 futures closed at 8603.70 on Thursday at a premium of 13.90 points over spot closing of 8,589.80, while Nifty August 2015 futures ended at 8642.70 at a primium of 52.90 points over spot closing. Nifty July futures saw contraction of 0.75 million (mn) units, taking the total outstanding open interest (OI) to 20.67 million (mn) units. The near month derivatives contract will expire on July 30, 2015.

From the most active contracts, SBI Bank July 2015 futures traded at premium of 0.05 points at 270.10 compared with spot closing of 270.05. The number of contracts traded were 19,510.

Tata Motors July 2015 futures traded at a discount of 0.65 points at 401.85 compared with spot closing of 402.50. The number of contracts traded were 51,003.

Reliance July 2015 futures traded at a premium of 2.95 points at 1047.90 compared with spot closing of 1,044.95. The number of contracts traded were 46,224.

Axis Bank July 2015 futures traded at a premium of 2.10 points at 584.9 compared with spot closing of 582.80. The number of contracts traded were 25,217.

Infosys July 2015 futures traded at a premium of 3.55 points at 1098.00 compared with spot closing of 1,094.45. The number of contracts traded were 25,860.

Among Nifty calls, 8700 SP from the July month expiry was the most active call with an addition of 0.69 million open interests.  Among Nifty puts, 8600 SP from the July month expiry was the most active put with contraction of 0.74 million open interests.  The maximum OI outstanding for Calls was at 8700 SP (5.36 mn) and that for Puts was at 8500 SP (6.30 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8638.43 --- Pivot Point 8606.12 --- Support --- 8557.48.

The Nifty Put Call Ratio (PCR) finally stood at 1.45 for July month contract.  The top five scrips with highest PCR on OI were Bosch (2.75), Dr. Reddys Laboratories (1.56), Motherson Sumi (1.30), BHEL (1.26) and IndusInd Bank (1.21). 

Among most active underlying, Reliance Industries witnessed a contraction of 1.54 million of Open Interest in the July month futures contract, followed by Lupin witnessing an addition of 0.15 million of Open Interest in the July month contract; Bajaj Auto witnessed an addition of 0.14 million of Open Interest in the July month contract, Infy witnessed a contraction of 0.44 million of Open Interest in the July month contract and Tata Motors witnessed a contraction of 0.80 million units of Open Interest in the July month's future contract.