Nifty snaps two days winning streak; ends below 8000 mark

Snapping its two days winning streak, CNX Nifty closed in the negative territory as nervousness creped in ahead of economic data due later in the day amid concerns that the monsoon could be deficient this year. Weakness in Indian rupee too weighed down sentiments. The rupee was trading lower at 66.42 per dollar at the time of equity markets closing against previous close of 66.14 per dollar on sustained month-end dollar demand from importers. On the global front, Asian markets ended mixed after top Federal Reserve officials kept the door open for an interest rate hike in September and investors braced for China economic data this week. Further, European shares declined in early trade, with Germany’s DAX and France’s CAC on track for their worst month in four years, hit by sliding Chinese stocks and prospects of a near-term US rate increase.

Back home, the benchmark got off to a soft start, weighed down by the weak cues from Asia and continuing uncertainty over Fed rate hike. Further, the sentiments remained down-beat with the Prime Minister Narendra Modi’s statement that the land ordinance will not be reissued. The ordinance first issued in December and repromulgated thrice, lapses today. The key index remained choppy through the morning trades but saw a sudden spurt in buying in early afternoon trades as sentiments got some support with RBI Governor Raghuram Rajan’s hint of an imminent rate cut, after he said that inflation has come down to the comfort zone quicker than expected and he is keeping a watch on data to see how much room is there for further easing of the monetary policy. Further, pushing for interest rate cut, Finance Minister Arun Jaitley said that inflation is under control while oil and commodity prices are also low and expressed hope that RBI will consider all these factors in its monetary policy review. The key indices soon capitalized on the momentum and touched intraday highs in afternoon session but the indices failed to hold onto the highs and receded to intraday lows in late afternoon trades post weak European market opening and on reports that Foreign institutional investors (FIIs) have pulled out a record Rs 17,000 crore from the Indian equity market in August amid concerns over a China-led global economic slowdown. Investors remained on sidelines ahead of quarterly Gross Domestic Product (GDP) data scheduled to be released post market hours today. Finally, Nifty ended the session below its crucial 8,000 mark with a cut of thirty eight points. Traders were seen piling position in Metal, Oil & Gas and PSU stocks while selling was witnessed in Power, Realty and Infrastructure sector stocks.

The top gainers from the F&O segment were Divi's Laboratories, Ajanta Pharma and Reliance Communications. On the other hand, the top losers were Mahindra & Mahindra Financial Services, Steel Authority of India and Voltas. In the index options segment, maximum OI was being seen in the 8300-8500 calls and 7800-8000 puts. In today's session, while the traders preferred to exit 8100 put, heavy buildup was seen in the 8000 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 increased by 5.42% and reached 24.59. The 50-share CNX Nifty was down by 30.65 points or 0.38% to settle at 7,971.30. Nifty September 2015 futures closed at 8000.05 on Monday at a premium of 28.75 points over spot closing of 7,971.30, while Nifty October 2015 futures ended at 8042.35 at a premium of 71.05 points over spot closing. Nifty September futures saw addition of 0.12 million (mn) units, taking the total outstanding open interest (OI) to 22.12 million (mn) units. The near month derivatives contract will expire on September 24, 2015. 

From the most active contracts, SBI September 2015 futures traded at premium of 1.65 points at 248.65 compared with spot closing of 247.00. The number of contracts traded were 29,072.

ICICI Bank September 2015 futures traded at a premium of 1.45 points at 279.45 compared with spot closing of 278.00. The number of contracts traded were 19,040.

Tata Motors September 2015 futures traded at a discount of 1.40 points at 339 compared with spot closing of 340.40. The number of contracts traded were 22,130.

Axis Bank September 2015 futures traded at a premium of 2.65 points at 510.55 compared with spot closing of 507.90. The number of contracts traded were 18,110.

Yes Bank September 2015 futures traded at a premium of 1.7 points at 692.3 compared with spot closing of 690.60. The number of contracts traded were 19,194.

Among Nifty calls, 8200 SP from the September month expiry was the most active call with an addition of 0.17 million open interests.  Among Nifty puts, 8000 SP from the September month expiry was the most active put with an addition of 0.48 million open interests. The maximum OI outstanding for Calls was at 8500 SP (3.75 mn) and that for Puts was at 8000 SP (4.83 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8027.28 --- Pivot Point 7987.62 --- Support --- 7931.63.

Among most active underlying, State Bank of India witnessed an addition of 2.46 million of Open Interest in the September month futures contract, followed by Sun Pharmaceuticals Industries witnessing an addition of 0.47 million of Open Interest in the September month contract; Infosys witnessed an addition of 0.27 million of Open Interest in the September month contract, Indiabulls Housing Finance witnessed an addition of 0.20 million of Open Interest in the September month contract and ICICI Bank witnessed an addition of 2.22 million units of Open Interest in the September month's future contract.