Nifty ends at intraday low; settles below 8600

Wednesday’s session turned out to be a daunting session of trade for Nifty which ended with a cut of over a percent, breaching its crucial 8,600 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 sentiment remained dismal after Raghuram Rajan at his last monetary policy review meeting as RBI governor hinted upside risks to inflation, while keeping key policy rates unchanged. Sentiment also remained under pressure with the report that the gross non-performing assets (GNPAs) of the public sector banks increased from Rs 2.16 lakh crore in 2013-14 to Rs 4.76 lakh crore in 2015-16.  The report also said that the top 100 borrowers of public sector banks owe nearly Rs 14 lakh crore to them. Also, traders failed to get any sense of relief with from the report that tax collections have grown up at a robust pace in the first four months of the current fiscal with central excise and personal income tax showing impressive gains. Direct tax collections grew 24% in April-July over corresponding period last year, while indirect taxes returned a 29.9% increase over the same period.

On global front, Asian stocks rose after Wall Street closed near record highs on Tuesday on hopes the Federal Reserve may hold rates after weak US productivity data, while European stocks traded lower as global investors remain cautious, considering the timing of the next interest rate hike by the U.S. Federal Reserve as well as the outlook for oil prices.

Back home, all the sectoral indices on the NSE settled in the negative territory with pharma losing the most, ending with a cut of over two percent followed by auto down by 1.93% and PSU Bank down by 1.65%. In scrip specific development, Mahindra & Mahindra shares fell over 2 per cent despite the company reported 12 per cent rise in standalone net profit at Rs 955.21 crore for the quarter ended June 30, 2016 against Rs 850.09 crore in the same quarter last year. The top gainers from the F&O segment were Tata Chemicals, Adani Ports and Special Economic Zone and Tata Communications. On the other hand, the top losers were Grasim Industries, GMR Infrastructure and Dish TV India. 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 2.65% and reached 14.92. The 50-share Nifty was down by 102.95 points or 1.19% to settle at 8,575.30.

Nifty August 2016 futures closed at 8598.05 on Wednesday at a premium of 22.75 points over spot closing of 8,575.30, while Nifty September 2016 futures ended at 8649.55 at a premium of 74.25 points over spot closing. Nifty August futures saw addition of 0.92 million (mn) units, taking the total outstanding open interest (OI) to 25.56 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 0.90 points at 232.15 compared with spot closing of 231.25. The number of contracts traded were 14,528.

ICICI Bank August 2016 futures traded at a premium of 0.40 points at 239.65 compared with spot closing of 239.25. The number of contracts traded were 12,489.   

Bank of Baroda August 2016 futures traded at a premium of 0.60 points at 160.65 compared with spot closing of 160.05. The number of contracts traded were 14,885.

Adani Ports and Special Economic Zone August 2016 futures traded at a premium of 1.95 points at 259.55 compared with spot closing of 257.60. The number of contracts traded were 19,518.   

Reliance Industries August 2016 futures traded at a premium of 5.60 points at 1007.80 compared with spot closing of 1,002.20. The number of contracts traded were 14,994. 

Among Nifty calls, 8700 SP from the August month expiry was the most active call with an addition of 1.36 million open interests. Among Nifty puts, 8600 SP from the August month expiry was the most active put with an contraction of 0.45 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.52 mn) and that for Puts was at 8500 SP (5.35 mn). The respective Support and Resistance levels of Nifty are: Resistance 8655.40--- Pivot Point 8610.00--- Support --- 8529.90.             

The Nifty Put Call Ratio (PCR) finally stood at 0.88 for August month contract. The top five scrips with highest PCR on OI were ICIL (2.00), GRASIM (1.44), BHARATFORG (1.36), GODREJIND (1.29) and YESBANK  (1.19).   

Among most active underlying Motherson Sumi Systems witnessed an addition of 1.16 million of Open Interest in the August month futures contract, followed Lupin witnessing an addition of 0.55 million of Open Interest in the August month contract; Adani Ports and Special Economic Zone witnessed a contraction of 0.46 million of Open Interest in the August month contract, ICICI Bank witnessed an contraction of 1.84 million of Open Interest in the August month contract and State Bank of India witnessed an contraction of 0.49 million units of Open Interest in the August month's future contract.