Subdued global cues drag Nifty below 8,400 mark

The local benchmark, Nifty continued its south-bound journey for the third consecutive day and snapped the session below its crucial 8400 mark. The lingering fears of a slowdown in China and Fed's signals at its latest policy meet, of a rate hike in the offing, seem to have rattled the sentiments of market participants. Besides, RBI governor Rajan stating that progress on monsoon will be keenly watched to assess the overall impact on inflation raised uncertainty about the likely prospect of interest rate cut. The India Meteorological Department too has predicted that the second half (August-September) of the four-month monsoon season will see a deficit of 16% of the long-term average, while the overall deficit is likely to be 12%. On the global front, Asian market ended mostly lower, with China's Shanghai Composite shedding more than 3%, while Hang Seng, Kospi and Straits Times losing about 1% each as the pessimistic assessments of China's economy seem to be dampening the prevailing sentiment. The European stocks fell in early trade, heading for a second straight loss, with energy stocks feeling the weight of falling oil prices and worries about China.

Back home, the index got off to a rough opening, extending the downtrend for the third straight session as pessimistic sentiments prevailed across Asian markets. Investors turned jittery after the Fed released the minutes of its latest policy meeting stating that the conditions for a rate hike are approaching. The key index suffered a setback in afternoon trades as sudden bouts of profit booking emerged in the local markets immediately after a somber European market opening.  Sentiments remained down-beat with a private report stating that the country remains a 'long way off' from a complete turnaround in the corporate investment cycle despite various positive economic indicators. The index witnessed a freefall in the session finding absolutely no support at any crucial levels and finally settled around the lowest point in the session. Market participants even neglected the Reserve Bank Governor Raghuram Rajan’s statement that the Indian economy is showing signs of improvement, adding that a pick-up in rural demand would further improve economic growth. Though, he said that RBI continues to watch the progress of monsoon to assess the overall impact on inflation as well as global developments.  Traders were seen piling position in FMCG stocks while selling was witnessed in Realty, Bankex and Metal sector stocks.

The top gainers from the F&O segment were Lupin, ITC and Bharat Petroleum Corporation. On the other hand, the top losers were Amtek Auto, Indiabulls Real Estate and Jaiprakash Associates. In the index options segment, maximum OI was being seen in the 8500-8800 calls and 8200-8400 puts. In today's session, the 8400, 8500 and 8600 Call strikes saw addition of 13.18, 20.28 and 6.59 lakh shares, respectively. On the other hand, 8500, 8400 and 8300 Put strikes saw contraction of 8.85 lakh, 16.78 lakh and 4.68 lakh shares, respectively on the back of profit booking.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.76% and reached 16.97. The 50-share CNX Nifty was down by 122.40points or 1.44% to settle at 8,372.75. Nifty August 2015 futures closed at 8380.05 on Thursday at a premium of 7.30 points over spot closing of 8,372.75, while Nifty September 2015 futures ended at 8419.35 at a premium of 46.60 points over spot closing. Nifty August futures saw addition of 0.24 million (mn) units, taking the total outstanding open interest (OI) to 14.65 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 271.40 compared with spot closing of 270.00. The number of contracts traded were 37,110.

ICICI Bank August 2015 futures traded at a discount of 0.25 points at 298.75 compared with spot closing of 299.00. The number of contracts traded were 28,355.

Tata Motors August 2015 futures traded at a discount of 2.05 points at 340.95 compared with spot closing of 343.00. The number of contracts traded were 25,472.

Reliance August 2015 futures traded at a premium of 3.60 points at 919.25 compared with spot closing of 915.65. The number of contracts traded were 33,457.

Axis Bank August 2015 futures traded at a discount of 0.95 points at 534.45 compared with spot closing of 535.40. The number of contracts traded were 30,448.

Among Nifty calls, 8500 SP from the August month expiry was the most active call with an addition of 1.69 million open interests.  Among Nifty puts, 8400 SP from the August month expiry was the most active put with a contraction of 1.72 million open interests. The maximum OI outstanding for Calls was at 8600 SP (5.83 mn) and that for Puts was at 8200 SP (6.66 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8462.82--- Pivot Point 8411.28--- Support --- 8321.22.

The Nifty Put Call Ratio (PCR) finally stood at 0.94 for August month contract.  The top five scrips with highest PCR on OI were Bosch (4), Maruti Suzuki India (1.56), Dr. Reddys Laboratories (1.54), Eicher Motors (1.25) and Indiabulls Housing Finance (1.22). 

Among most active underlying, State Bank of India witnessed an addition of 1.55 million of Open Interest in the August month futures contract, followed by Reliance Industries witnessing an addition of 0.54 million of Open Interest in the August month contract; Yes Bank  witnessed a contraction of 0.55 million of Open Interest in the August month contract, Lupin witnessed a contraction of 0.014 million of Open Interest in the August month contract and Sun Pharmaceuticals Industries witnessed a contraction of 0.29 million units of Open Interest in the August month's future contract.