Nifty wipes out early gains to end lower; settles below 8600 mark

Erasing all their early gains, the Indian benchmark -- Nifty -- ended the session in red on Thursday. Profit booking which took place in second half of session mainly dragged the market lower. After a positive start, market manage to hold their gain in first half of trade, as sentiment remained upbeat with the Commerce and Industry Minister Nirmala Sitharaman pitching for as much as 200 basis points that is 2 per cent, interest rate cut by RBI to help the cash-starved MSME sector. Meanwhile, Indian government has approved a revised double tax avoidance agreement (DTAA) between India and Cyprus for the prevention of fiscal evasion with respect to Taxes on Income. The rupee recovered against the US dollar in early trade at the Interbank Foreign Exchange on increased selling of the American currency by exporters and banks, provided some upside support. However, heavy selling pressure witness in afternoon session and market extended losses to touch intraday day lows. Sentiment was affected by the private repot indication that India Inc is enduring its worst earnings drawdown of the last 20 years, burdened by weak growth, high interest costs with excessive private sector debt and over-capitalized balance sheets. Trader also remained wary ahead of August series derivatives expiry.

On global front, European stocks saw their biggest fall in three weeks and currency markets were noticeably subdued as investors took to sidelines. Meanwhile, Asian shares ended in red, ahead of Federal Reserve Chairwoman Janet Yellen’s speech scheduled on August 26, 2016 which could provide hints about the timing of the next rate hike from the Fed.

The top gainers from the F&O segment were Just Dial, Wockhardt and Engineers India. On the other hand, the top losers were Torrent Pharmaceuticals, KPIT Technologies and Dish TV India. In the index options segment, maximum OI was being seen in the 8500-8800 calls and 8400-8600 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 1.50% and reached 13.28. The 50-share Nifty was down by 58.10 points or 0.67% to settle at 8,592.20

Nifty September 2016 futures closed at 8644.95 on Thursday at a premium of 52.75 points over spot closing of 8,592.20, while Nifty September 2016 futures ended at 8684.55 at a premium of 92.35 points over spot closing. Nifty September futures saw addition of 5.05 million (mn) units, taking the total outstanding open interest (OI) to 26.38 million (mn) units. The near month derivatives contract will expire on September 29, 2016.

From the most active contracts, ICICI Bank September 2016 futures traded at a premium of 1.65 points at 248.65 compared with spot closing of 247.00. The numbers of contracts traded were 18,544.

HDFC Bank September 2016 futures traded at a premium of 8.30 points at 1267.30 compared with spot closing of 1,259.00. The numbers of contracts traded were 17,099.

Sun Pharmaceuticals September 2016 futures traded at a premium of 4.80 points at 769.90 compared with spot closing of 765.10. The numbers of contracts traded were 19,770.

Reliance Industries September 2016 futures traded at a premium of 5.55 points at 1019.50 compared with spot closing of 1,013.95. The numbers of contracts traded were 19,537.   

Infosys September 2016 futures traded at a premium of 6.60 points at 1043.50 compared with spot closing of 1,036.90. The numbers of contracts traded were 16,609.   

Among Nifty calls, 8700 SP from the September month expiry was the most active call with a addition of 1.09 million open interests. Among Nifty puts, 8600 SP from the September month expiry was the most active put with an addition of 0.52 million open interests. The maximum OI outstanding for Calls was at 8700 SP (8.00 mn) and that for Puts was at 8400 SP (5.98 mn). The respective Support and Resistance levels of Nifty are: Resistance 8655.62 --- Pivot Point 8619.63 --- Support --- 8556.22.             

The Nifty Put Call Ratio (PCR) finally stood at 1.02 for September month contract. The top five scrips with highest PCR on OI were M&MFIN (4.23), IBREALEST (1.45), MCLEODRUSS (1.41), ORIENTBANK (1.38) and AMARAJABAT (1.29).   

Among most active underlying State Bank of India witnessed an addition of 18.56 million of Open Interest in the September month futures contract, followed Maruti Suzuki India witnessing an addition of 0.63 million of Open Interest in the September month contract, ICICI Bank witnessed a addition  of 20.98 million of Open Interest in the September month contract, Reliance Capital witnessed an addition  of 3.24 million of Open Interest in the September month contract and Reliance Industries witnessed an addition  of 5.36 million units of Open Interest in the September month's future contract.