Nifty ends lower for fourth straight session

The fifty stock index -- Nifty – ended weak for the fourth straight session, as investors remain edgy ahead of the F&O expiry due on Thursday coupled with fears of foreign money leaving Indian shores after government proposed to look into the Special Investigative Team's stringent norms on participatory notes (P-notes).  On the global front, Asian stock markets ended mostly in red as Chinese markets saw another session of volatility a day after the heaviest one-day losses in more than eight years. However, European stocks rallied after five days of losses as a slew of encouraging earnings reports as well as merger and acquisition news helped offset recent concerns about a slowdown in China.

After getting a positive start, nifty showed some strength in morning trades, but the sentiments turned pessimistic in afternoon trades and index started drifting lower, as sentiments turned somber over the reports that the central bank might keep the interest rates unchanged during its next bi-monthly policy review meeting, which will be held on August 4, 2015. Besides, persistent fall in the China’s benchmark Shanghai Composite coupled with reform uncertainty and Parliament deadlock hurt the sentiments. However, losses remained capped as the Finance Minister Arun Jaitley has assured investors that the government will not take any action that may jeopardise investment climate. Some support also came with Chief Economic Advisor (CEA) Arvind Subramanian’s statement that India can grow at 8-10%, provided exports put up a strong show. Market, for most part of the session, see-saw around the neutral line as some investors remained sideways ahead of the US Federal Open Market Committee (FOMC) meeting that begins today, which could further give signals on whether the Fed will hike the rates considering the strength in the US economy. In the final hour of trade market turned negative as investors turned cautious with Moody's report that Indian banks will continue to reel under the impact of bad loans in the current financial year, although new NPAs may decline. Traders were seen piling position in Capital Goods, Banking and Power stock while selling was witnessed in Realty, Metal and Auto sector stocks. Finally, Nifty ended the trade with a cut of about three tens of a percent near its intraday low breaching its psychological 8,350 mark.

The top gainers from the F&O segment were Aditya Birla Nuvo, Punjab National Bank and CEAT. On the other hand, the top losers were Syndicate Bank, JSW Energy and Bank of India. In the index options segment, maximum OI was being seen in the 8400-8600 calls and 8400-8200 puts. In today's session, while the traders preferred to exit 8500 put, heavy buildup was seen in the 8400 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 decreased by 2.77% and reached 15.91. The 50-share CNX Nifty was down by 24.00 points or 0.29% to settle at 8,337.00. Nifty July 2015 futures closed at 8350.95 on Tuesday at a premium of 13.95 points over spot closing of 8,337.00, while Nifty August 2015 futures ended at 8393.05 at a premium of 56.05 points over spot closing. Nifty July futures saw contraction of 3.09 million (mn) units, taking the total outstanding open interest (OI) to 14.86 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 discount of 0.55 points at 259.80 compared with spot closing of 259.25. The number of contracts traded were 39,417.

ICICI Bank July 2015 futures traded at a premium of 0.60 points at 285.85 compared with spot closing of 285.25. The number of contracts traded were 32,859.

Panjab National Bank July 2015 futures traded at a discount of 0.05 points at 142.45 compared with spot closing of 142.50. The number of contracts traded were 38,988.

Tata Motors July 2015 futures traded at a premium of 1.15 points at 371.15 compared with spot closing of 370.00. The number of contracts traded were 32,150.

Reliance July 2015 futures traded at a premium of 6.35 points at 1017.45 compared with spot closing of 1,011.10. The number of contracts traded were 35,753.

Among Nifty calls, 8400 SP from the July month expiry was the most active call with an addition of 1.28 million open interests.  Among Nifty puts, 8300 SP from the July month expiry was the most active put with a contraction of 0.15 million open interests. The maximum OI outstanding for Calls was at 8600 SP (6.10 mn) and that for Puts was at 8300 SP (4.64 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8382.35 --- Pivot Point 8352.05 --- Support --- 8306.70.

The Nifty Put Call Ratio (PCR) finally stood at 0.97 for July month contract.  The top five scrips with highest PCR on OI were Hindustan Petroleum Corporation (1.83), Dr. Reddys Laboratories (1.27), IndusInd Bank (1.26), BHEL (1.14) and Ashok Leyland (1.13). 

Among most active underlying, Maruti Suzuki witnessed a counteraction of 0.51 million of Open Interest in the July month futures contract, followed by Reliance Industries witnessing an addition of 0.02 million of Open Interest in the July month contract; HDFC Bank witnessed a contraction of 3.15 million of Open Interest in the July month contract, Punjab National Bank witnessed a contraction of 2.08 million of Open Interest in the July month contract and State Bank of India witnessed a contraction of 10.25 million units of Open Interest in the July month's future contract.