Nifty tumbles lower for third day in a row; ends below 8200 level

The fifty stock index -- Nifty -- extended its downfall for third straight day and finished the choppy day of trade with a cut of over half a percent as investors remained cautious ahead of the conclusion of the US Federal Reserve’s meeting. Besides, caution ahead of expiry of October month contracts in the derivatives segment tomorrow also influenced the trading sentiment. On the global front, Asian equity markets ended in red, barring Nikkei on expectations that the Bank of Japan (BoJ) could introduce further stimulus measures at its policy meeting to be held later this week. Investors remained cautious ahead of the Federal Reserve's policy panel meet, which ends later today. Although the Federal Reserve is likely to keep interest rates unchanged, investors are looking forward to clues on the timing of a widely expected rate hike. Meanwhile, European markets made a positive start after Sweden’s Central bank keeping benchmark rate unchanged expanded its bond-purchase plan for a fourth time since February.

Back home, the benchmark got off to a somber opening, extending the downtrend for the third straight session as pessimistic sentiments prevailed across Asian markets. Thereafter, the key Index failed to show any kind of fervor due to lack of encouraging leads. Sentiments remained subdued with Finance Minister Arun Jaitley and his deputy Jayant Sinha admitted that meeting the Rs 69,500 crore disinvestment target for the fiscal year will be difficult, with both putting the blame on low commodity prices.  The selling pressure accentuated in the mid afternoon trades as investors took to across the board risk aversion. The sentiments, which were already muted on disappointing Q2 earnings by some bluechip companies, were also affected by offloading of positions by some investors to raise funds to subscribe to InterGlobe Aviation’s Rs 3,018 crore initial public offer (IPO). Investors failed to draw any sense of relief with World Bank's report that India now ranks 130 out of 189 countries in the ease of doing business, moving up 12 places from 2014. According to World Bank's Chief Economist and Senior Vice President Kaushik Basu, a forward movement of 12 spots in the ease of doing business by an economy of the size of India is a 'remarkable achievement. Besides, depreciation in Indian rupee too dampened the sentiments. Rupee was trading at 65.01 per dollar at the time of equity markets closing compared with its previous close of 64.96 due to month-end demand for the US currency from importers. However, late short covering in blue-chip stocks and supportive leads from European markets ensured that local bourses go home with relatively small losses. Traders were seen piling position in Consumer Durables, TECK and IT stocks, while selling was witnessed in Banking, Power and Realty sector stocks.

The top gainers from the F&O segment were SKS Microfinance, SRF and NCC. On the other hand, the top losers were Axis Bank, Amara Raja Batteries and Bharat Forge. In the index options segment, maximum OI was being seen in the 8200-8500 calls and 7800-8200 puts. In today's session, while the traders preferred to exit 8200 put, heavy buildup was seen in the 8150 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 increased by 3.05% and reached 17.04. The 50-share CNX Nifty was down by 61.70 points or 0.75% to settle at 8,171.20. Nifty October 2015 futures closed at 8173.60 on Wednesday at a premium of 2.40 points over spot closing of 8,171.20, while Nifty November 2015 futures ended at 8212.30 at a premium of 41.10 points over spot closing. Nifty October futures saw contraction of 4.43 million (mn) units, taking the total outstanding open interest (OI) to 10.69 million (mn) units. The near month derivatives contract will expire on October 29, 2015.  

From the most active contracts, ICICI Bank October 2015 futures traded at discount of 0.90 points at 271.95 compared with spot closing of 272.85. The number of contracts traded were 37,057.   

SBI Bank October 2015 futures traded at a premium of 1.05 points at 242.75 compared with spot closing of 241.70. The number of contracts traded were 35,045.      

Tata Motors October 2015 futures traded at a discount of 0.50 points at 386.50 compared with spot closing of 387.00. The number of contracts traded were 36,552.  

Axis Bank October 2015 futures traded at a discount of 0.55 points at 483.70 compared with spot closing of 484.25. The number of contracts traded were 82,532.    

HDFC Bank October 2015 futures traded at a premium of 1.45 points at 1113.35 compared with spot closing of 1,111.90. The number of contracts traded were 35,221.   

Among Nifty calls, 8200 SP from the October month expiry was the most active call with an addition of 1.35 million open interests.  Among Nifty puts, 8200 SP from the October month expiry was the most active put with a contraction of 1.83 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.52 mn) and that for Puts was at 8000 SP (4.67 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8209.60 --- Pivot Point 8170.70 --- Support --- 8132.30.

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 Tata Motors (1.36), Aurobindo Pharma (1.33), ZEEL (1.23), STAR (1.23) and Bajaj Auto (1.17).   

Among most active underlying, Axis Bank witnessed a contraction of 2.61 million of Open Interest in the October month futures contract, followed by Maruti Suzuki witnessing a contraction of 0.13 million of Open Interest in the October month contract; ICICI Bank witnessed a contraction of 1.06 million of Open Interest in the October month contract, Reliance Industries witnessed an addition of 0.67 million of Open Interest in the October month contract and HDFC Bank witnessed a contraction of 6.24 million units of Open Interest in the October month's future contract.