Nifty snaps two-day losing streak; ends tad below 8500 mark

Value buying in some blue-chip stocks after two sessions of losses and hopes of a delay in next month's US rate hike decision boosted investor sentiments and helped Indian equity benchmark Nifty to end the session on a positive note. Gains were led by export-focused companies after the rupee fell to a near two-year low in early trade, while declining crude oil prices also boosted the sentiments. Some support also came with Union Parliamentary Affairs Minister M Venkaiah Naidu’s statement that the Centre would hold discussions with Congress and other parties to bring them around to facilitate passage of the GST before the winter session of Parliament. On the global front, Asian markets ended mostly in red as concerns about the impact of the weaker yuan weighed on the markets. The European stock markets too fell in early trade, extending a recent losing streak on the back of persistent worries over China, while brewer Carlsberg slumped after cutting its outlook.

Back home, after getting a negative start, Nifty slowly but steadily started gathering steam and surged by over half a percent by noon trade. Sentiment got boost with Finance Minister Arun Jaitley making a case for interest rate cut, stating that RBI will take note of the declining inflation and take a decision accordingly. The FM has also asserted that India must completely open up its economy to global investment, except for rare sectors. Some support also came with Chinese stocks reversing sharp declines to end higher after the central bank injected more funds into the financial system for a second day in a bid to calm panicky markets. Appreciation in Indian rupee too aided the sentiments, the rupee recovered by 11 paise to 65.20 per dollar after on fresh selling of dollars by banks and exporters. However, the index failed to capitalize on the initial momentum and continued to see-saw around its crucial 8500 mark as investors stayed on the sidelines in the absence of any positive triggers and weakness in other regional markets. Traders were seen piling position in Consumer Durables, IT and Capital Goods stocks, while selling was witnessed in Metal, PSU and Realty sector stocks.

The top gainers from the F&O segment were Jaiprakash Associates, Jaiprakash Power Ventures and Divi's Laboratories. On the other hand, the top losers were Amtek Auto, Kaveri Seed Company and Indiabulls Real Estate. 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 8400 put. On the other hand, traders exited from 8500 Call, while 8600 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 1.96% and reached 16.68. The 50-share CNX Nifty was up by 28.60 points or 0.34% to settle at 8,495.15. Nifty August 2015 futures closed at 8505.40 on Wednesday at a premium of 10.25 points over spot closing of 8,495.15, while Nifty September 2015 futures ended at 8545.80 at a premium of 50.65 points over spot closing. Nifty August futures saw addition of 0.16 million (mn) units, taking the total outstanding open interest (OI) to 14.41 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 278.85 compared with spot closing of 278.40. The number of contracts traded were 29,528.

ICICI Bank August 2015 futures traded at a discount of 0.25 points at 304.75 compared with spot closing of 305.00. The number of contracts traded were 15,391.

Tata Motors August 2015 futures traded at a premium of 0.05 points at 352.05 compared with spot closing of 352.00. The number of contracts traded were 25,356.

Reliance August 2015 futures traded at a premium of 1.85 points at 954.85 compared with spot closing of 953.00. The number of contracts traded were 23,575.

Aurobindo Pharma August 2015 futures traded at a discount of 1.10 points at 816.90 compared with spot closing of 818.00. The number of contracts traded were 18,220.Among Nifty calls, 8500 SP from the August month expiry was the most active call with a contraction of 0.02 million open interests.  Among Nifty puts, 8400 SP from the August month expiry was the most active put with an addition of 0.88 million open interests. The maximum OI outstanding for Calls was at 8700 SP (5.17 mn) and that for Puts was at 8200 SP (6.70 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8535.08 --- Pivot Point 8480.52 --- Support --- 8440.58.

The Nifty Put Call Ratio (PCR) finally stood at 1.19 for August month contract.  The top five scrips with highest PCR on OI were Bosch (4), Maruti Suzuki India (1.72), Dr. Reddys Laboratories (1.46), Bank of Baroda (1.39) and Indiabulls Housing Finance (1.21). 

Among most active underlying, State Bank of India witnessed a contraction of 0.33 million of Open Interest in the August month futures contract, followed by Maruti Suzuki India witnessing a contraction of 0.31 million of Open Interest in the August month contract; Reliance Industries  witnessed a contraction of 0.62 million of Open Interest in the August month contract, Infosys witnessed an addition of 0.15 million of Open Interest in the August month contract and Ashok Leyland witnessed an addition of 1.98 million units of Open Interest in the August month's future contract.