Nifty skids lower for second day in a row

The fifty stock index -- Nifty -- continued its southward journey for second consecutive day on Tuesday and finished the choppy day of trade with a cut of over one tens of a percent, on account of profit booking after recent run up, with metal and information technology shares leading the fall. Software stocks remained under pressure after Infosys trimmed its US dollar revenue growth guidance, clouding the outlook for the sector. On the global front, Asian equity markets ended mostly in red, after Chinese trade data signaled weakening global and domestic demand, the latest evidence that the world’s second largest economy is stalling. Further, the stocks on the European indices extend their early losses and dive deep in the red zone after the investors’ sentiment was further dampened by poor economic news from the UK and Germany.

Back home, after getting a weak start, Indian benchmark Nifty traded below neutral line for most part of the day, though sharp losses witnessed in mid-afternoon trade, but index recovered most of its looses and ended the session with the slight cut of eleven point.  Sentiments remained down-beat as India's retail inflation based on the consumer price index (CPI) for September increased to 4.41%, from 3.74% recorded for the previous month, on the back of higher food prices. A sharp plunge in the oil prices pushed the Asian stocks lower with European peers joining the tandem which further hurt trading sentiments. However, losses remained capped as industrial production grew at a nearly three-year high of 6.4 per cent in August on account of improvement in manufacturing as well as mining activity and better offtake of capital goods. Some support also came with the report that India is better placed among emerging markets to tackle risks arising out of global economic slowdown, reaffirming an optimistic outlook despite some lingering concerns. Meanwhile, Oil explorers such as Oil and Natural Gas Corp also fell after US and Brent crude tumbled in the previous session to post their biggest daily percentage declines since the start of September. On the other hand, shares of some Consumer durables companies were trading higher after the sector registered a growth of 17 percent compared with a contraction of 15 percent in August 2014, while the consumer goods sector recorded a growth of 6.8 percent as against a contraction of 6.2 percent in August last year.

The top gainers from the F&O segment were IFCI, NCC and Jaiprakash Associates. On the other hand, the top losers were Idea Cellular, Oil & Natural Gas Corporation and Hindalco Industries. In the index options segment, maximum OI was being seen in the 8200-8500 calls and 7800-8100 puts. In today's session, while the traders preferred to exit 8200 put, heavy buildup was seen in the 7900 put. On the other hand, traders exited from 8400 Call, while 8200 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 5.79% and reached 18.01. The 50-share CNX Nifty was down by 11.90 points or 0.15% to settle at 8,131.70. Nifty October 2015 futures closed at 8138.80 on Tuesday at a premium of 7.10 points over spot closing of 8,131.70, while Nifty November 2015 futures ended at 8176.40 at a premium of 44.70 points over spot closing. Nifty October futures saw contraction of 0.75 million (mn) units, taking the total outstanding open interest (OI) to 21.08 million (mn) units. The near month derivatives contract will expire on October 29, 2015.  

From the most active contracts, SBI Bank October 2015 futures traded at premium of 0.05 points at 243.95 compared with spot closing of 243.90. The number of contracts traded were 24,561. 

ICICI Bank October 2015 futures traded at a premium of 0.35 points at 287.55 compared with spot closing of 287.20. The number of contracts traded were 15,156.  

Axis Bank October 2015 futures traded at a premium of 1.20 points at 491.85 compared with spot closing of 490.65. The number of contracts traded were 18,944. 

Tata Motors October 2015 futures traded at a discount of 1.95 points at 359.55 compared with spot closing of 361.50. The number of contracts traded were 30,310.  

Tata Steel October 2015 futures traded at a premium of 1.10 points at 245.95 compared with spot closing of 244.85. The number of contracts traded were 16,995.

Among Nifty calls, 8200 SP from the October month expiry was the most active call with an addition of 0.13 million open interests.  Among Nifty puts, 8000 SP from the October month expiry was the most active put with an addition of 0.02 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.48 mn) and that for Puts was at 8100 SP (4.77 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8158.43 --- Pivot Point 8123.52 --- Support --- 8096.78.

The Nifty Put Call Ratio (PCR) finally stood at 1.24 for October month contract.  The top five scrips with highest PCR on OI were Lupin (1.47), Indraprastha Gas (1.25), Tata Steel (1.15), Tata Motors (1.10) and Exide Industries (1.09).   

Among most active underlying, Tata Consultancy Services witnessed an addition of 0.40 million of Open Interest in the October month futures contract, followed by Infosys witnessing an addition of 0.92 million of Open Interest in the October month contract; Maruti Suzuki India witnessed an addition of 0.12 million of Open Interest in the October month contract, Tata Motors witnessed an addition of 1.19 million of Open Interest in the October month contract and State Bank of India witnessed an addition of 2.24 million units of Open Interest in the October month's future contract.