Nifty declines for third consecutive session

The fifty stock index -- Nifty -- continued its southward journey for third consecutive day on Wednesday and finished the choppy day of trade with cut of three tens of a percent after blue-chips Tata Consultancy Services and Hindustan Unilever declined following disappointment quarterly earnings. Weak global cues further dampened the sentiments, as after a negative close of the US markets overnight, the Asian markets too followed the trend and ended mostly in red terrain after Chinese factory-gate prices equaled their biggest slump since the global financial crisis. Further, European counters have made a weak start, CAC, DAX and FTSE were trading with a cut of over half a percent in early deals.

Back home, after getting a feeble start, Indian benchmark Nifty traded blow neutral line for most part of the day, although the index claw back into positive territory many times but failed to sustained its gains and ended the session with the loss of about three tens of a percent. Further, wholesale price index (WPI)-based inflation, which fell for the 11th successive month, failed to boost sentiment in the market. September WPI inflation stood at minus 4.54 per cent against minus 4.95 per cent in August. Investors even neglected the Finance Finance Minister Arun Jaitley’s statement that reform measures would continue in order to boost economic activity.  Meanwhile, IT stocks came under pressure for third consecutive session as TCS declined after a soft quarter, adding to the IT sector's woes after Infosys' guidance cut and HCL Technologies' revenue warning. Some Metal stocks too came under presser on Chinese concern, after Consumer inflation in China cooled more than expected. On the other hand, Consumer durable stocks attracted buying attention after the recent industrial output data indicated strong growth in the sector. Further, shipping stocks surged after the report that state-owned firms may have to give half their freight business to local shippers to help rescue an industry battered by the global commodities downturn, while some Infra stocks like HCC and Gammon India gained after Cabinet approved one-time fund infusion for stressed highway projects.

The top gainers from the F&O segment were SRF, Engineers India and Century Textiles & Industries. On the other hand, the top losers were Bharat Forge, Tata Consultancy Services and JSW Energy. 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 7700 put, heavy buildup was seen in the 8100 put. On the other hand, traders exited from 8100 Call, while 8000 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.64% and reached 17.72. The 50-share CNX Nifty was down by 23.80 points or 0.29% to settle at 8,107.90. Nifty October 2015 futures closed at 8121.40 on Wednesday a premium of 13.50 points over spot closing of 8,107.90, while Nifty November 2015 futures ended at 8203.15 at a premium of 95.25 points over spot closing. Nifty October futures saw contraction of 1.30 million (mn) units, taking the total outstanding open interest (OI) to 19.78 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 discount of 0.80 points at 244.20 compared with spot closing of 245.00. The number of contracts traded were 16,587. 

Axis Bank October 2015 futures traded at a premium of 0.40 points at 496.40 compared with spot closing of 496.00. The number of contracts traded were 17,758.  

Tata Motors October 2015 futures traded at a discount of 0.70 points at 352.85 compared with spot closing of 353.55. The number of contracts traded were 18,218.  

Tata Steel October 2015 futures traded at a premium of 1.95 points at 248.45 compared with spot closing of 247.90. The number of contracts traded were 16,963.  

Reliance October 2015 futures traded at a discount of 0.55 points at 903.65 compared with spot closing of 904.20. The number of contracts traded were 17,916.  

Among Nifty calls, 8200 SP from the October month expiry was the most active call with an addition of 0.05 million open interests.  Among Nifty puts, 8100 SP from the October month expiry was the most active put with a contraction of 0.75 million open interests. The maximum OI outstanding for Calls was at 8200 SP (5.23 mn) and that for Puts was at 8000 SP (4.76 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8132.68 --- Pivot Point 8114.52 --- Support --- 8089.73.

The Nifty Put Call Ratio (PCR) finally stood at 1.29 for October month contract.  The top five scrips with highest PCR on OI were Lupin (1.63), Exide Industries (1.07), Tata Steel (1.07), Tata Motors (1.05) and Tata Motors DVR (1).   

Among most active underlying, Tata Consultancy Services witnessed an addition of 0.11 million of Open Interest in the October month futures contract, followed by Infosys witnessing a contraction of 0.03 million of Open Interest in the October month contract; Hindustan Unilever witnessed an addition of 0.55 million of Open Interest in the October month contract, Zee Entertainment Enterprises witnessed an addition of 2.26 million of Open Interest in the October month contract and Reliance Industries witnessed a contraction of 0.42 million units of Open Interest in the October month's future contract.