Weak macroeconomic data drag Nifty below 8,650 mark

Indian benchmark index --Nifty-- finished the session in negative territory on Tuesday, as investors cut down their bets on disappointing macroeconomic data and weak trend in global markets. After a negative opening, market traded in red terrain as sentiments took a hit after the weak IIP, CPI data.  Industrial output grew by 2.1% in June, although down from 4.2% a year ago, on account of poor show by manufacturing and heavy contraction in capital goods. In second half market extended losses after Wholesale Price Index (WPI) inflation for month of July climbed to a two-year high at 3.55 per cent as compared to 1.62 per cent in the previous month. Beside, country’s merchandise exports decline 6.84% from a year earlier in the month, after a marginal rise in June, too weighed sentiments. In last leg of trade nifty ended the day in red with 29.60 point. Sentiments also dampened on account of selling in Infosys after Royal Bank of Scotland cancelled a contract amid inflation worries.

On global front, European stocks edged lower weighed down by industrial stocks after Swiss firm Schindler cut the top end of its revenue growth outlook for the full year. Most Asian stocks ended lower as the price of crude oil took a breather from a three-day rally.

The top gainers from the F&O segment were Cipla, NCC and Adani Ports. On the other hand, the top losers were Bharti Infratel, Wockhardt and Bharat Financial Inclusion. In the index options segment, maximum OI was being seen in the 8600-9000 calls and 8400-8700 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 3.00% and reached 14.18. The 50-share Nifty was down by 29.60 points or 0.34% to settle at 8,642.55.

Nifty August 2016 futures closed at 8659.90 on Tuesday at a premium of 17.35 points over spot closing of 8,642.55, while Nifty September 2016 futures ended at 8708.05 at a premium of 65.50 points over spot closing. Nifty August futures saw addition of 0.20 million (mn) units, taking the total outstanding open interest (OI) to 24.83 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 1.00 points at 247.20 compared with spot closing of 246.20. The number of contracts traded were 27,204.

ICICI Bank August 2016 futures traded at a premium of 1.50 points at 249.05 compared with spot closing of 247.55. The number of contracts traded were 13,919

Hindalco Industries August 2016 futures traded at a premium of 0.30 points at 154.75 compared with spot closing of 154.45. The number of contracts traded were 10,166.

Sun Pharmaceuticals August 2016 futures traded at a premium of 3.65 points at 785.65 compared with spot closing of 782.00. The number of contracts traded were 13,033.   

Axis Bank August 2016 futures traded at a premium of 2.10 points at 585.05 compared with spot closing of 582.95. The number of contracts traded were 10,215. 

Among Nifty calls, 8700 SP from the August month expiry was the most active call with a addition of 0.91 million open interests. Among Nifty puts, 8600 SP from the August month expiry was the most active put with an addition of 0.31 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.40 mn) and that for Puts was at 8500 SP (5.63 mn). The respective Support and Resistance levels of Nifty are: Resistance 8683.12--- Pivot Point 8641.78--- Support --- 8601.22.             

The Nifty Put Call Ratio (PCR) finally stood at 0.98 for August month contract. The top five scrips with highest PCR on OI were ICIL (1.67), BHARATFORG (1.37), YESBANK (1.26), EICHERMOT (1.13) and JINDALSTEL (1.12).   

Among most active underlying State Bank of India witnessed an contraction of 0.92 million of Open Interest in the August month futures contract, followed Reliance Capital witnessing an contraction of 0.20 million of Open Interest in the August month contract, ICICI Bank witnessed a contraction of 1.32 million of Open Interest in the August month contract, Cipla  witnessed an contraction of 1.59 million of Open Interest in the August month contract and Hindalco Industries witnessed an addition of 3.67 million units of Open Interest in the August month's future contract.