Weak global cues drag Nifty below 8,550 mark

Pressurized by weak global cues, Nifty ended the Wednesday’s trade with a cut of almost a percent, breaching its crucial 8,550 mark. Soon after flat-to-positive start market entered into red terrain and never looked confident during the session to end near intraday lows, as investors awaited a decision on the goods and services tax bill as Rajya Sabha debated the legislation. Sentiment also remain under pressure with a private report stating that consumer confidence in India declined in the second quarter this year with concerns over fuel prices and rising inflation, making the country lose the top position it occupied for the last two years as the most confident globally. Also, traders failed to get any sense of relief with a survey showing that the Services Purchasing Managers’ Index, or PMI, rose to 51.9 in July from 50.3 in June. The reading for July was the highest in three months.

Besides, weakness in Asian counters also influenced investors’ sentiment, as a disappointing Japanese stimulus package and oil trading below $40 a barrel renewed concern the global economic recovery is faltering, while European stocks edged lower in the early deals as investors traded cautiously amid a slew of earnings and the fall in oil price.

The top gainers from the F&O segment were Aditya Birla Nuvo, HCL Technologies and MRF. On the other hand, the top losers were Bajaj Finance, Indiabulls Real Estate and Jubilant Foodworks. In the index options segment, maximum OI was being seen in the 8500-9000 calls and 8000-8700 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 3.47% and reached 16.23. The 50-share Nifty was down by 78.05 points or 0.91% to settle at 8,544.85

Nifty August 2016 futures closed at 8582.55 on Wednesday at a premium of 37.70 points over spot closing of 8,544.85, while Nifty September 2016 futures ended at 8631.30 at a premium of 86.45 points over spot closing. Nifty August futures saw addition of 1.19 million (mn) units, taking the total outstanding open interest (OI) to 24.00 million (mn) units. The near month derivatives contract will expire on August 25, 2016.

From the most active contracts, State Bank of India August 2016 futures traded at a premium of 0.80 points at 227.35 compared with spot closing of 226.55. The number of contracts traded were 12,295.

ICICI Bank August 2016 futures traded at a premium of 2.00 points at 243.30 compared with spot closing of 241.30. The number of contracts traded were 13,787.   

Tata Motors of August 2016 futures traded at a premium of 2.10 points at 481.40 compared with spot closing of 479.30. The number of contracts traded were 13,230.

Reliance Industries August 2016 futures traded at a premium of 7.25 points at 1000.15 compared with spot closing of 992.90. The number of contracts traded were 11,075.   

Sun Pharmaceuticals Industries August 2016 futures traded at a premium of 3.90 points at 843.45 compared with spot closing of 839.55. The number of contracts traded were 11,687. 

Among Nifty calls, 8700 SP from the August month expiry was the most active call with an addition of 1.41 million open interests. Among Nifty puts, 8500 SP from the August month expiry was the most active put with an addition of 0.12 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.54 mn) and that for Puts was at 8500 SP (4.47 mn). The respective Support and Resistance levels of Nifty are: Resistance 8610.33--- Pivot Point 8569.97--- Support --- 8504.48.             

The Nifty Put Call Ratio (PCR) finally stood at 0.76 for August month contract. The top five scrips with highest PCR on OI were EICHERMOT (1.55), SRF (1.53), JINDALSTEL (1.18), TECHM (1.15) and GODREJIND  (1.05).   

Among most active underlying HCL Technologies witnessed an contraction of 0.09 million of Open Interest in the August month futures contract, followed Maruti Suzuki India witnessing an addition of 1.17 million of Open Interest in the August month contract; Bharat Financial Inclusion witnessed a addition of 0.62 million of Open Interest in the August month contract, ICICI Bank witnessed an addition of 5.46 million of Open Interest in the August month contract and Tata Motors  witnessed an addition of 0.87 million units of Open Interest in the August month's future contract.