Nifty ends below 8650 mark on weak global cues

Nifty ended the Monday’s trade with a cut of almost half a percent. Soon after a positive start market entered into red terrain and never looked confident during the session to end near intraday lows, as sentiments remained downbeat after the government appointed Urjit Patel as the next RBI governor. Patel is known for his hawkish view on inflation just like Raghuram Rajan whose term as the RBI governor will end on September 4, 2016. Weakness in rupee too dampened sentiment. Indian rupee depreciated at fresh three-week low against the dollar at the forex market following increased demand for the American currency from importers and banks. Traders failed to get any sense of relief with Francis Gurry, director-general at the World Intellectual Property Organization stating that India can break into the top-25 rank in the next 10 years. Market participants also overlooked the global rating agency Moody’s Investors Service latest report that it may consider India for a rating upgrade if the government is successful in introducing more growth enhancing economic and institutional reform. Policies like relaxation of thresholds for Foreign Direct Investment (FDI) and a change in the monetary policy framework that fosters credibility will contribute to more stable economic environment.

On global front, European markets were trading with a cut of around half a percent on speculation over a possible US rate hike before the end of the year. Asian stocks ended mixed amid uncertainty whether the US Federal Reserve is readying an interest rate hike next month.

The top gainers from the F&O segment were Indraprastha Gas, Biocon and Indo Count Industries. On the other hand, the top losers were Bharat Financial Inclusion, Sun TV Network and Apollo Tyres. In the index options segment, maximum OI was being seen in the 8400-9000 calls and 8400-8700 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 2.08% and reached 14.23. The 50-share Nifty was down by 37.75 points or 0.44% to settle at 8,629.15

Nifty August 2016 futures closed at 8633.20 on Monday at a premium of 4.05 points over spot closing of 8,629.15, while Nifty September 2016 futures ended at 8686.20 at a premium of 57.05 points over spot closing. Nifty August futures saw contraction of 5.04 million (mn) units, taking the total outstanding open interest (OI) to 18.16 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 1.10 points at 255.25 compared with spot closing of 254.15. The numbers of contracts traded were 23,168.

ICICI Bank August 2016 futures traded at a discount of 0.20 points at 252.30 compared with spot closing of 252.50. The numbers of contracts traded were 15,514.

Bank of Baroda August 2016 futures traded at a premium of 0.10 points at 160.40 compared with spot closing of 160.30. The numbers of contracts traded were 13,470.

HDFC Bank August 2016 futures traded at a discount of 2.35 points at 1249.60 compared with spot closing of 1,251.95. The numbers of contracts traded were 22,734.   

Tata Steel August 2016 futures traded at a premium of 1.25 points at 388.55 compared with spot closing of 387.30. The numbers of contracts traded were 12,106.   

Among Nifty calls, 8700 SP from the August month expiry was the most active call with a addition of 1.10 million open interests. Among Nifty puts, 8600 SP from the August month expiry was the most active put with an contraction of 0.76 million open interests. The maximum OI outstanding for Calls was at 8700 SP (6.54 mn) and that for Puts was at 8500 SP (5.92 mn). The respective Support and Resistance levels of Nifty are: Resistance 8671.33 -- Pivot Point 8642.67-- Support -- 8600.48.             

The Nifty Put Call Ratio (PCR) finally stood at 0.90 for August month contract. The top five scrips with highest PCR on OI were ICIL (2.50), YESBANK (1.72), PCJEWELLER  (1.30), BHARATFORG (1.26) and JSWSTEEL (1.19).   

Among most active underlying State Bank of India witnessed an contraction of 10.54 million of Open Interest in the August month futures contract, followed HDFC Bank witnessing an contraction of 8.39 million of Open Interest in the August month contract, ICICI Bank witnessed a contraction  of 13.78 million of Open Interest in the August month contract, Yes Bank witnessed an contraction  of 1.08 million of Open Interest in the August month contract and Tata Steel witnessed an contraction  of 3.17 million units of Open Interest in the August month's future contract.