Nifty trim losses; ends below 8,500 mark

The fifty stock index -- Nifty -- ended in red as investors booked profits in index heavyweights after sharp gains in the previous session even as state-owned banks surged after the government announced a plan to revive the ailing state-owned banks, including a Rs 20,000-crore capital infusion lifeline. Besides, the uncertainty over key reforms such the deadlock over the GST Bill in the parliament last week and weak Asian markets also dampened investor sentiment. On the global front, Asian markets ended mostly lower, dragged down by faltering Chinese stocks, however, better than expected Japanese growth figures limited losses. Further, European stock indices rose in early trade as concern eased that China’s currency devaluation would hurt the region’s exporters

Back home, Indian index nifty started the week on a dismal note as investors resort to book profits at higher levels amid weak global cues. Sentiments remained down-beat as India's exports contracted for the eighth straight month by 10.3 percent in July to USD 23.13 billion, pushing the trade deficit to USD 12.81 billion. Investors’ sentiments apart from the concern of weak macro data were also weighed down by the report from the weather department that Monsoon rainfall deficit has widened to 10% as a strengthening El Nino weather pattern trimmed rainfall, raising fears of the first drought in six years. The index witnessed some recovery in afternoon session as frenzied buying witnessed in PSU banks after the government announced a plan to revive the state-owned banks and this capped the downside. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 403.76 crore on August 14, 2014.  However, the index failed to gain momentum and dipped further in the late afternoon session. Sentiment also took a hit as key goods and services tax (GST) bill could not be passed in the Monsoon Session of Parliament, which ended last week. Thereafter, the key indices failed to show any kind of fervor due to lack of encouraging leads. Traders were seen piling position in Metal, PSU and Consumer Durables stocks while selling was witnessed in Realty, Oil & Gas and Capital Goods sector stocks. Eventually, Nifty ended the session below its crucial 8,500 mark with a cut of about half a percent.

The top gainers from the F&O segment were Bank of Baroda, Canara Bank and Amara Raja Batteries. On the other hand, the top losers were Kaveri Seed Company, Amtek Auto and Cipla. 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 8500 put, heavy buildup was seen in the 7900 put. On the other hand, traders exited from 8300 Call, while 8500 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.76% and reached 16.46. The 50-share CNX Nifty was down by 41.25 points or 0.48% to settle at 8,477.30. Nifty August 2015 futures closed at 8488.05 on Monday at a premium of 10.75 points over spot closing of 8,477.30, while Nifty September 2015 futures ended at 8526.60 at a premium of 49.30 points over spot closing. Nifty August futures saw contraction of 0.56 million (mn) units, taking the total outstanding open interest (OI) to 14.49 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 0.45 points at 279.65 compared with spot closing of 279.20. The number of contracts traded were 55,235.

Tata Motors August 2015 futures traded at a discount of 0.55 points at 355.45 compared with spot closing of 356.00. The number of contracts traded were 24,115.

Bank of Baroda August 2015 futures traded at a premium of 0.60 points at 212.65 compared with spot closing of 212.05. The number of contracts traded were 38,926.

Tata Steel August 2015 futures traded at a discount of 0.10 points at 247.40 compared with spot closing of 247.50. The number of contracts traded were 23,012.

Reliance August 2015 futures traded at a premium of 1.85 points at 952.75 compared with spot closing of 950.90. The number of contracts traded were 22,095.

Among Nifty calls, 8600 SP from the August month expiry was the most active call with an addition of 0.19 million open interests.  Among Nifty puts, 8400 SP from the August month expiry was the most active put with a contraction of 0.43 million open interests. The maximum OI outstanding for Calls was at 8600 SP (5.07 mn) and that for Puts was at 8200 SP (5.93 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8529.25 --- Pivot Point 8478.65 --- Support --- 8426.70.

The Nifty Put Call Ratio (PCR) finally stood at 1.02 for August month contract.  The top five scrips with highest PCR on OI were Bosch (4), Maruti Suzuki India (1.52), Bank of Baroda (1.50), Dr. Reddys Laboratories (1.47) and DLF (1.30). 

Among most active underlying, State Bank of India witnessed a contraction of 1.81 million of Open Interest in the August month futures contract, followed by Bank of Baroda witnessing an addition of 4.04 million of Open Interest in the August month contract; Cipla witnessed an addition of 1.24 million of Open Interest in the August month contract, Canara Bank witnessed an addition of 1.10 million of Open Interest in the August month contract and Reliance Industries witnessed an addition of 0.59 million units of Open Interest in the August month's future contract.