Nifty ends below 7000 mark

The fifty stock index -- Nifty -- ended lower on Monday on account of selling by fund and retail investors in the frontline blue chip counters. Weakness in the global markets too dampened the market sentiment. Besides, Union Budget 2016 failed to cheer Dalal Street as investors were largely expecting from Finance Ministor Arun Jaitley. On the global front, Asian markets ended mostly in red, with renewed concerns over China's economic fundamentals and the deluge of economic data due this week dragging stocks. European shares edged lower after the meeting of the leaders of the G20 group of industrialised nations did not announce any plans to boost economic growth.

After getting a flat to positive opening, market turned into negative territory and traded with marginal cut in morning deals, as investors remained sidelines and refrained from any buying activity ahead of Union Budget 2016. Thereafter, market extended its loss and reached to intraday low, as Market participants were disappointed with the increase in Securities Transaction Tax on options from 0.017 percent to 0.05 percent and also the Dividend Distribution Tax where Jaitley has proposed an extra 10 percent tax in the hands of the investor on dividend income over Rs 10 lakh in a year, but Nifty bounced back from day’s low and entered into positive territory in late afternoon session, as buying by domestic institutions and reports about an imminent rate cut by RBI, However Market once again entered into negative territory in  last leg of trade and finally ended with a cut of over half a percent. Meanwhile, Irrigation and fertiliser sector stocks gained as Finance Minister Arun Jaitley's proposed to increase agriculture output of the country. He has proposed to allocate Rs 35,984 crore in FY17 for agriculture and farmer welfare and Rs 17,000 crore for irrigation schemes in FY17. The government aims to double income of farmer in five years.

The top gainers from the F&O segment were Aurobindo Pharma, IDBI Bank and Jaiprakash Associates. On the other hand, the top losers were Oil & Natural Gas Corporation, Arvind and Cairn India. In the index options segment, maximum OI was being seen in the 7000-8000 calls and 6300-7000 puts. In today's session, while the traders preferred to exit 6900 put, heavy buildup was seen in the 6300 put. On the other hand, traders exited from 8500 Call, while 7200 call witnessed considerable OI addition.  

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 7.814% and reached 20.15. The 50-share Nifty was down by 42.70 points or 0.61% to settle at 6,987.05.   

Nifty March 2016 futures closed at 7008.95 on Monday at a premium of 21.90 points over spot closing of 6,987.05, while Nifty April 2016 futures ended at 7040.05 at a premium of 53.00 points over spot closing. Nifty March futures saw contraction of 0.44 million (mn) units, taking the total outstanding open interest (OI) to 18.05 million (mn) units. The near month derivatives contract will expire on March 31, 2016.                    

From the most active contracts, SBI March 2016 futures traded at a discount of 1.85 points at 157.60 compared with spot closing of 159.45. The number of contracts traded were 59,504.                      

ICICI Bank March 2016 futures traded at a discount of 1.45 points at 190.25 compared with spot closing of 191.70. The number of contracts traded were 34,634.            

Bank of Baroda March 2016 futures traded at a premium of 0.50 points at 132.75 compared with spot closing of 132.25. The number of contracts traded were 19,383.       

Axis Bank March 2016 futures traded at a premium of 1.65 points at 378.45 compared with spot closing of 376.80. The number of contracts traded were 46,289.                                                

ITC March 2016 futures traded at a premium of 2.25 points at 297.95 compared with spot closing of 295.70. The number of contracts traded were 34,805.  

Among Nifty calls, 7300 SP from the March month expiry was the most active call with an addition of 0.99 million open interests. Among Nifty puts, 6800 SP from the March month expiry was the most active put with an addition of 0.76 million open interests. The maximum OI outstanding for Calls was at 7500 SP (5.11 mn) and that for Puts was at 7000 SP (4.93 mn). The respective Support and Resistance levels of Nifty are: Resistance 7112.50 --- Pivot Point 6969.15 --- Support --- 6843.70.            

The Nifty Put Call Ratio (PCR) finally stood at 0.88 for March month contract. The top five scrips with highest PCR on OI were Divis Laboratories (3.29), Indo Count Industries (2.50), Indian Overseas Bank (2.36), Container Corporation of India (1.40) and PTC India (1.38).  

Among most active underlying, State Bank of India witnessed an addition of 3.98 million of Open Interest in the March month futures contract, followed by ITC witnessing an addition of 1.77 million of Open Interest in the March month contract; Axis Bank witnessed a contraction of 5.88 million of Open Interest in the March month contract, Reliance Industries witnessed a contraction of 0.95 million of Open Interest in the March month contract and ICICI Bank witnessed a contraction of 5.82 million units of Open Interest in the March month's future contract.