Nifty snaps six days winning streak; ends below 8150 mark

Snapping its six days winning streak, CNX Nifty closed in the negative territory on back of profit-taking in blue chips while lack of announcements on restructuring power distributors' burgeoning loans also hurt. State-run electricity distributors, who collectively owe $66 billion, are running out of cash and struggling to repay loans, squeezing banks’ ability to spur credit growth. Beside, weak global cues coupled with depreciation in rupee also weighed on the sentiment. On the global front, Asian equity markets ended mixed, ahead of the release of minutes from the Federal Reserve’s latest policy meeting, with Shanghai stocks closing on firm note after Chinese markets reopened today following an extended holiday. Weak machinery orders data forced the Japanese market break a 6-session winning streak, while the Australian market rallied on the support lent by resource stocks. Further, European stocks opened lower and have been trading weak following recent gains and the release of weak German exports data.

Back home, after getting a cautious start, Indian benchmark nifty slipped in negative territory and gradually enlarged its losses in late morning deals. Thereafter, the key index failed to show any kind of fervor due to lack of encouraging leads ahead of the second quarter corporate result season, starting officially next week. Sentiments remained down-beat on the Crisil’s research report that Indian Inc is expected to report single-digit growth in revenues for the fifth consecutive quarter. This is mainly because of fragile consumption demand, especially in the rural areas, weakness in investment-linked sectors, and the meltdown in global commodity prices. The gauge moved only sideways thereafter but touched intraday lows in the late afternoon session. Though the key gauge recovered from the lows of the day but could not succeed in minimizing the huge losses by the end of trading session. Eventually Nifty ended the session below its crucial 8150 mark with a cut of over half a percent. Barring metal, all other NSE sectoral indices ended in the red. Among them, Energy index fell the most by 1.45 per cent, followed by FMCG1.35 per cent, Pharma 0.90 per cent and Bank Nifty 0.81 per cent, while metal index was up 0.54 per cent and.

The top gainers from the F&O segment were Mcleod Russel India, UltraTech Cement and UCO Bank. On the other hand, the top losers were Bharti Infratel, Divi's Laboratories and Glenmark Pharmaceuticals. In the index options segment, maximum OI was being seen in the 8200-8500 calls and 7800-8100 puts. In today's session, the 8300, 8400 and 8500 Call strikes saw addition of 2.48, 3.37 and 5.03 lakh shares, respectively. On the other hand, 8100 and 7900 Put strikes saw addition of 3.45 and 6.68 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 1.16% and reached 19.56. The 50-share CNX Nifty was down by 48.05 points or 0.59% to settle at 8,129.35.

Among Nifty calls, 8300 SP from the October month expiry was the most active call with an addition of 0.24 million open interests.  Among Nifty puts, 8000 SP from the October month expiry was the most active put with an addition of 0.01 million open interests. The maximum OI outstanding for Calls was at 8300 SP (4.71 mn) and that for Puts was at 8100 SP (4.22 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8182.12 --- Pivot Point 8143.98 --- Support --- 8091.22.

The Nifty Put Call Ratio (PCR) finally stood at 1.25 for October month contract.  The top five scrips with highest PCR on OI were Indraprastha Gas (1.87), Exide Industries (1.69), Colgate-Palmolive (India) (1.15), SAIL (1.09) and Tata Motors (1.07).   

Among most active underlying, Reliance Industries witnessed a contraction of 0.07 million of Open Interest in the October month futures contract, followed by Infosys witnessing an addition of 0.52 million of Open Interest in the October month contract; Axis Bankwitnessed an addition of 1.63 million of Open Interest in the October month contract, State Bank of India witnessed an addition of 0.96 million of Open Interest in the October month contract and Tata Motors witnessed an addition of 1.78 million units of Open Interest in the October month's future contract.