Markets trim losses; ends below 7800 mark

After witnessing bloodbath in the first half, domestic benchmark S&P Nifty pared most of its losses and ended the day’s trade with a cut of about 30 points.  Worries over likely delay in Goods and Services Tax (GST) and capital outflows by foreign funds weighed on markets. Foreign investors sold a record Rs 16,877 crore worth of domestic stocks in August. On top of that, they sold Indian stocks worth nearly Rs 6,000 crore in the past seven sessions. On the global front, Asian market ended mostly in red after lacklustre Chinese and Japanese economic data added to heightened worries about slackening global growth, sapping investors’ appetite for riskier assets. US stocks ended more than 1 per cent lower on Wednesday after rallying the day before, led by declines in shares of Apple and energy companies, which fell with oil prices. Also, European counters have made a weak start and CAC, DAX and FTSE were trading with a cut of over half a percent in early deals.

Back home, the benchmark got off to a pessimistic start following the Asian peers as lacklustre economic data in China heightened worries about the slowdown in the world's second largest economy. Investors turned jittery after Standard & Poor's downgraded Brazil's credit rating to junk grade earlier today, and slashed its growth forecast for Asian economies. Sentiments remained down-beat after the report that the goods and services tax (GST) is set to miss its April 1, 2016 deadline as Union Cabinet on Wednesday decided not to call a special parliament session to pass the Constitutional Amendment Bill in the wake of stiff opposition from the Congress party. However, the index witnessed some recovery in afternoon session as sentiments got some support with positive indirect tax collection data. The indirect tax collection growth slowed a bit in August compared to July but remained robust on account of a sharp pick-up in excise duty collection on account of additional revenue measures. Indirect taxes-excise duty, service tax and customs duty - rose 36.7 per cent in August to Rs 54,396 crore over the same month in 2014. Some support also came with the report that Reserve Bank of Indian (RBI) is closely observing the data as well as other macro developments and will go for another round of interest rate cut as and when the situation is conducive. Traders were seen piling position in Capital Goods, Auto and FMCG stocks while selling was witnessed in Consumer Durables, Teck and Metal sector stocks. Indian market is likely to remain volatile till the crucial US Fed meet, which is scheduled for September 16-17. An interest rate hike in the US could accelerate the selling from FIIS who would like to park their money in US bonds.

The top gainers from the F&O segment were Wockhardt, CEAT and JSW Energy. On the other hand, the top losers were Sun TV Network, UPL and Petronet LNG. In the index options segment, maximum OI was being seen in the 8200-8500 calls and 7500-7800 puts. In today's session, while the traders preferred to exit 7700 put, heavy buildup was seen in the 7900 put. On the other hand, traders exited from 8200 Call, while 7900 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 1.83% and reached 24.74. The 50-share CNX Nifty was up by 30.50 points or 0.39% to settle at 7788.10.

Nifty September 2015 futures closed at 7808.25 on Thursday at a premium of 20.15 points over spot closing of 7,788.10, while Nifty October 2015 futures ended at 7845.55 at a premium of 57.45 points over spot closing. Nifty September futures saw addition of 0.47 million (mn) units, taking the total outstanding open interest (OI) to 22.72 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 discount of 1.00 points at 228.60 compared with spot closing of 229.60. The number of contracts traded were 26,960.

ICICI Bank September 2015 futures traded at a discount of 2.10 points at 267.80 compared with spot closing of 269.90. The number of contracts traded were 20,574.

Tata Motors September 2015 futures traded at a discount of 1.25 points at 353.75 compared with spot closing of 355.00. The number of contracts traded were 29,838.

Tata Steel September 2015 futures traded at a discount of 1.40 points at 241.20 compared with spot closing of 242.60. The number of contracts traded were 19,853.

Reliance September 2015 futures traded at a discount of 1.60 points at 868.90 compared with spot closing of 870.50. The number of contracts traded were 16,720.

Among Nifty calls, 8000 SP from the September month expiry was the most active call with an addition of 0.17 million open interests.  Among Nifty puts, 7600 SP from the September month expiry was the most active put with an addition of 0.10 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.29 mn) and that for Puts was at 7500 SP (4.34 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7845.80--- Pivot Point 7762.15--- Support --- 7704.45.

The Nifty Put Call Ratio (PCR) finally stood at 1.07 for September month contract.  The top five scrips with highest PCR on OI were Indraprastha Gas (1.70), Bajaj Finance (1.17), Ceat (1.14), Ultratech Cement (1.12) and JSW Steel (1.04).   

Among most active underlying, CEAT witnessed a contraction of 0.44 million of Open Interest in the September month futures contract, followed by State Bank of India witnessing an addition of 1.35 million of Open Interest in the September month contract; Tata Motors witnessed an addition of 0.49 million of Open Interest in the September month contract, Larsen & Toubro witnessed an additional of 0.24 million of Open Interest in the September month contract and Maruti Suzuki India witnessed an addition of 0.11 million units of Open Interest in the September month's future contract.