Nifty skids lower for second day in a row

The fifty stock index -- Nifty -- continued its southward journey for second consecutive day on Tuesday and finished the choppy day of trade with a cut of ten points on the back of selling in blue-chip stocks like HDFC, Lupin and Sun Pharma after Moody's slashed India's growth forecast. Besides, worries over deficient rains which has widened to 10 per cent and is projected to rise to 12 per cent by the end of monsoon season next month, also weighed sentiments. On the global front, Asian markets closed mostly in red on worries that cooling demand in China will weigh on the trade-reliant region, while the dollar held firm after strong US housing data offset concerns from a weak manufacturing report. European markets made a modestly higher start after German Chancellor Angela Merkel said she’s confident the International Monetary Fund will join Greece’s third bailout and signaled willingness to consider debt relief to help make it happen.

Back home, after getting a gap up start, Indian equity benchmark showed some strength in early trade and touched day’s high in late morning session on the back of value-buying in several blue-chips amid optimism that easing global crude oil prices will cut country's import bill. The sentiments were also lifted by overnight gains on Wall Street that was driven by strong US housing data. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 142.34 crore on August 17, 2015. However, the index eased its optimism and started downward trend in early afternoon trade as investors turned jittery with the report that Rating agency Moody’s Investors Service lowered India’s growth forecast to 7 per cent for 2015, from 7.5 per cent projected earlier, citing monsoon concerns and cautioned that further risks to growth stems from slow pace of reforms. Sentiments weakened further with the rapport that India's foodgrain production in 2014-15 is likely to decline by 12.36 million tonnes from the 2013-14 production level when the country had reported its highest ever foodgrain production of 265.04 million tonnes. The early noon session saw across the board sell-off which led the frontline index below its crucial 8450 mark, but some short covering thereafter ensured that the local bourse eventually settle off the low point of the day. Traders were seen piling position in IT, Consumer Durables and Teck stocks while selling was witnessed in Metal, Infrastructure and PSU sector stocks.

The top gainers from the F&O segment were SRF, Ashok Leyland and Apollo Tyres. On the other hand, the top losers were Sun TV Network, Gail and Coal India. 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 8600 put, heavy buildup was seen in the 8200 put. On the other hand, traders exited from 8700 Call, while 8500 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.62% and reached 16.36. The 50-share CNX Nifty was down by 10.75 points or 0.13% to settle at 8,466.55. Nifty August 2015 futures closed at 8481.70 on Tuesday at a premium of 15.15 points over spot closing of 8,466.55, while Nifty September 2015 futures ended at 8520.70 at a premium of 54.15 points over spot closing. Nifty August futures saw contraction of 0.24 million (mn) units, taking the total outstanding open interest (OI) to 14.25 million (mn) units. The near month derivatives contract will expire on August 27, 2015. 

From the most active contracts, Ashok Leyland August 2015 futures traded at premium of 0.50 points at 97.55 compared with spot closing of 97.05. The number of contracts traded were 31,454.

SBI August 2015 futures traded at a discount of 0.10 points at 284.65 compared with spot closing of 284.75. The number of contracts traded were 51,576.

Tata Motors August 2015 futures traded at a premium of 0.75 points at 349.30 compared with spot closing of 348.55. The number of contracts traded were 18,247.

Tata Steel August 2015 futures traded at a discount of 0.15 points at 252.25 compared with spot closing of 252.40. The number of contracts traded were 24,894.

Bank of Baroda August 2015 futures traded at a premium of 0.55 points at 213.15 compared with spot closing of 212.60. The number of contracts traded were 22,251.

Among Nifty calls, 8500 SP from the August month expiry was the most active call with an addition of 0.31 million open interests.  Among Nifty puts, 8400 SP from the August month expiry was the most active put with an addition of 0.15 million open interests. The maximum OI outstanding for Calls was at 8700 SP (5.02 mn) and that for Puts was at 8200 SP (6.26 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8517.00--- Pivot Point 8475.30--- Support --- 8424.85.

The Nifty Put Call Ratio (PCR) finally stood at 1.08 for August month contract.  The top five scrips with highest PCR on OI were Bosch (4), Maruti Suzuki India (1.74), Bank of Baroda (1.45), Dr. Reddys Laboratories (1.4) and DLF (1.36). 

Among most active underlying, State Bank of India witnessed a contraction of 3.14 million of Open Interest in the August month futures contract, followed by Ashok Leyland witnessing a contraction of 1.56 million of Open Interest in the August month contract; Bank of Barodawitnessed a contraction of 0.65 million of Open Interest in the August month contract, Canara Bank witnessed an addition of 0.17 million of Open Interest in the August month contract and Maruti Suzuki India witnessed a contraction of 0.01 million units of Open Interest in the August month's future contract.