Nifty ends lower on subdued global cues

The fifty stock index -- Nifty -- snapping two days gaining streak, ended the session in red on Friday as weak global cues and disappointing earnings results from some blue-chip companies kept investors on edge ahead of the release of U.S. jobs data. Sentiments turned subdued on the reports that market regulator SEBI has started cracking down on offshore units of major global banks for their suspected role in manipulation of share prices in the domestic market. On the global front, Asian markets closed mostly in red on Friday, while Shanghai Composite closed higher on reports that a government agency and Chinese funds are looking to add billions into the stock market. Besides, European shares fell in early deals, weighed down by Germany’s top share index after a surprising fall in industrial output.

Back home, After getting a negative start, nifty traded near its neutral line for most part of trade as investors remained sideways in the absence of any significant trigger at domestic front ahead of US employment data that may help determine whether the Federal Reserve could raise interest rates in near future. The selling pressure accentuated in the mid afternoon trades as weak results of industrial-goods makers raised fresh concerns over a much-anticipated recovery in India's investment cycle and earnings growth. Sentiments remained down-beat on the report that Rainfall was 26% less than normal during the week that ended on Wednesday, mainly due to a 50% shortage in the southern states. Investors remained cautious with Rajya Sabha being adjourned again with no work amid protests by the opposition parties, although Finance Minister expressed his hopes of meeting GST deadline. However, losses remained capped with Global Ratings agency Moody’s report that the Indian government’s plan to infuse Rs 70,000 crore equity capital into public sector banks (PSBs) is credit-positive, as it reverses an earlier policy of selective capital infusion. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 108.93 crore on August 06, 2015. Besides, late short covering in blue-chip stocks ensured that the index go home with relatively small losses. Traders were seen piling position in Oil & Gas, Consumer Durables and Auto stocks, while selling was witnessed in Power, Metal and Banking sector stocks.

The top gainers from the F&O segment were Hindustan Petroleum Corporation, CEAT and Oil & Natural Gas Corporation. On the other hand, the top losers were Motherson Sumi Systems, Bharat Heavy Electricals and Adani Enterprises. In the index options segment, maximum OI was being seen in the 8600-8800 calls and 8200-8400 puts. In today's session, while the traders preferred to exit 8700 put, heavy buildup was seen in the 8600 put. On the other hand, traders exited from 8900 Call, while 8800 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 1.22% and reached 14.91. The 50-share CNX Nifty was down by 24.05 points or 0.28% to settle at 8,564.60. Nifty August 2015 futures closed at 8594.10 on Friday at a premium of 29.50 points over spot closing of 8,564.60, while Nifty September 2015 futures ended at 8633.85 at a premium of 69.25 points over spot closing. Nifty August futures saw contraction of 0.05 million (mn) units, taking the total outstanding open interest (OI) to 16.82 million (mn) units. The near month derivatives contract will expire on August 27, 2015.

From the most active contracts, SBI August 2015 futures traded at discount of 0.80 points at 282.75 compared with spot closing of 281.95. The number of contracts traded were 22,801.

Tata Motors August 2015 futures traded at a premium of 0.70 points at 393.45 compared with spot closing of 392.75. The number of contracts traded were 45,335.

Reliance August 2015 futures traded at a premium of 5.45 points at 989.45 compared with spot closing of 984.00. The number of contracts traded were 19,551.

BHEL August 2015 futures traded at a discount of 3.30 points at 263.40 compared with spot closing of 266.70. The number of contracts traded were 47,721.

ONGC August 2015 futures traded at a premium of 0.50 points at 283.05 compared with spot closing of 282.55. The number of contracts traded were 15,708.

Among Nifty calls, 8600 SP from the August month expiry was the most active call with a contraction of 0.01 million open interests.  Among Nifty puts, 8500 SP from the August month expiry was the most active put with a contraction of 0.06 million open interests. The maximum OI outstanding for Calls was at 8800 SP (5.23 mn) and that for Puts was at 8200 SP (6.10 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8589.47--- Pivot Point 8571.08--- Support --- 8546.22.

The Nifty Put Call Ratio (PCR) finally stood at 1.17 for August month contract.  The top five scrips with highest PCR on OI were Bosch (4), Dr. Reddys Laboratories (1.82), Aditya Birla Nuvo (1.41), Maruti Suzuki India (1.39) and Bank of Baroda (1.26). 

Among most active underlying, BHEL witnessed an addition of 3.95 million of Open Interest in the August month futures contract, followed by Tata Motors witnessing a contraction of 0.20 million of Open Interest in the August month contract; Hindustan Petroleum Corporation witnessed an addition  of 0.58 million of Open Interest in the August month contract, State Bank of India witnessed an addition of 1.07 million of Open Interest in the August month contract and Reliance Industries witnessed a contraction of 0.20 million units of Open Interest in the August month's future contract.