Bears run berserk late in the session; Nifty ends below 8550 level

The fifty stock index -- Nifty -- extended its downfall for second straight day and finished the volatile day of trade with a cut of about half a percent. Investors got the jitters on concerns that the governments' reforms process will get delayed as key GST and Land Bills may spill over to the next session as the Lok Sabha and the Rajya Sabha stood adjourned for yet another day amid continued Opposition protest. On the global front, Asian markets closed mostly in red, with stocks in China posting their biggest one-day gain in a month on expectations that Beijing will maintain its market support by buying shares. A raft of trade and inflation data from China released over the weekend painted a disappointing picture of the economy, raising the prospect of further stimulus from the authorities to prop up growth. Besides, Wall Street ended lower on Friday on the back of declines in oil prices and upbeat job growth data that was seen as putting the Federal Reserve on course for a potential rate hike in September.

Back home, after getting a cautious start, CNX Nifty showed some strength and touched day’s high in morning trade on the back of value-buying in several blue-chips amid optimism that easing global crude oil prices will cut country's import bill. Some support also came with a survey report of CII ASCON, which has said that the economy is showing signs of a turnaround, albeit moderately, on the back of continued policy actions, implementation and enhanced business and consumer confidence. Global cues too remained supportive with European counters making a positive opening and CAC, DAX and FTSE all were trading with a gain of around half a percent in early deals. Market traded in the tight range till mid afternoon trade lingering near its crucial 8600 level but, it was the final hour of trade where market witnessed steep fall of about 90 points as investors turned cautious after reports suggests that the GST Bill is unlikely to in the ongoing monsoon session. Sentiment was also dampened as the Land Bill has been deferred till next Parliament session as no consensus has been reached on controversial clauses. The contentious Land Acquisition Bill will not come to Parliament before the Winter Session, with the Joint Committee of Parliament examining the measure deciding to seek more time to finalise its report after Congress and TMC sought more time to study certain clauses. Investors remained cautious with the report that Foreign Direct Investment (FDI) in services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, has dipped 15% to $488 million during April-May 2015 as compared to $574 miilion during same period of last year, as per latest data released by Department of Industrial Policy and Promotion (DIPP). With selling being broad-based nature, most of the sectoral indices on NSE capitulated to selling pressure, with stocks from realty and finance counters proving to be exceptions.

The top gainers from the F&O segment were Divi's Laboratories, Jindal Steel & Power and MindTree. On the other hand, the top losers were Jaiprakash Associates, Jaiprakash Power Ventures and Voltas. 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 8400 put, heavy buildup was seen in the 8600 put. On the other hand, traders exited from 9000 Call, while 8700 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 3.72% and reached 15.46. The 50-share CNX Nifty was down by 39.00 points or 0.46% to settle at 8,525.60. Nifty August 2015 futures closed at 8544.30 on Monday at a premium of 29.50 points over spot closing of 8,525.60, while Nifty September 2015 futures ended at 8583.20 at a premium of 57.60 points over spot closing. Nifty August futures saw contraction of 0.24 million (mn) units, taking the total outstanding open interest (OI) to 16.57 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 premium of 1.40 points at 283.90 compared with spot closing of 282.50. The number of contracts traded were 27,762.

ICICI Bank August 2015 futures traded at a premium of 2.50 points at 310.50 compared with spot closing of 308.00. The number of contracts traded were 13,535.

Tata MotorsAugust 2015 futures traded at a premium of 1.60 points at 384.60 compared with spot closing of 383.00. The number of contracts traded were 50,997.

Reliance August 2015 futures traded at a premium of 7.20 points at 973.50 compared with spot closing of 966.30. The number of contracts traded were 17,205.

BHEL August 2015 futures traded at a discount of 1.60 points at 270.20 compared with spot closing of 271.80. The number of contracts traded were 20,678.

Among Nifty calls, 8700 SP from the August month expiry was the most active call with an addition of 0.65 million open interests.  Among Nifty puts, 8500 SP from the August month expiry was the most active put with a contraction of 0.01 million open interests. The maximum OI outstanding for Calls was at 8800 SP (5.23 mn) and that for Puts was at 8200 SP (5.83 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8598.83--- Pivot Point 8548.32--- Support --- 8475.08.

The Nifty Put Call Ratio (PCR) finally stood at 1.13 for August month contract.  The top five scrips with highest PCR on OI were Bosch (2.67), Dr. Reddys Laboratories (1.88), Maruti Suzuki India (1.55), Aditya Birla Nuvo (1.50) and BHEL (1.38). 

Among most active underlying, Tata Motors witnessed an addition of 0.13 million of Open Interest in the August month futures contract, followed by Wockhardt witnessing an addition of 0.15 million of Open Interest in the August month contract; State Bank of India witnessed a contraction of 2.14 million of Open Interest in the August month contract, Hindustan Petroleum Corporation  witnessed an addition of 0.33 million of Open Interest in the August month contract and BHEL witnessed an addition of 0.28 million units of Open Interest in the August month's future contract.