Weak GDP, Core Sector data drag Nifty lower

Indian benchmark -- Nifty -- ended the volatile day of trade slightly in red on Thursday. Profit booking which took place in last hour of session mainly dragged the market below its neutral line. After a cautious start market traded mostly in green in first half of the session, as sentiment remained upbeat with the India Inc expects economy to grow at a healthier pace in coming quarters on the back of a good monsoon even as a pick-up in investments remains elusive. Markets extended its gains after manufacturing activity in India rose more-than-expected in the last quarter. India’s manufacturing activity expanded at its fastest pace in 13 months in August, with pickup in demand from domestic and external markets. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance - surged to 52.6 in August from 51.8 in July. However, traders opted to book profit at higher level in final hour of trade. Sentiments remained dampened with weak macro-economic data. Indian economy grew at the slowest pace in last six quarters at 7.1 per cent in the April-June period of current fiscal mainly due to subdued performance of mining, construction and farm sectors. Core Sector growth slowing to 3.2 percent in July, compared to 5.2 percent recorded in June. However, the cumulative growth of the sector during April-July period of the fiscal was 4.9 percent. Finally, nifty ended the session slightly in red snapping its three days gaining streak.

On global front, European stocks climbed Thursday, with advances for bank and mining shares putting the region's benchmark on course to start the month of September with a win, while Asian stock markets ended mostly in red on Thursday following the negative lead from Wall Street and the steep drop in crude oil prices overnight. Investors also looked ahead to Friday's release of the closely watched U.S. monthly jobs report and its impact on the outlook for interest rates.

The top gainers from the F&O segment were PC Jeweller, Jain Irrigation Systems and Castrol India. On the other hand, the top losers were Idea Cellular, Reliance Communications and Bharti Airtel. In the index options segment, maximum OI was being seen in the 8700-9000 calls and 8500-8800 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 0.74% and reached 13.34. The 50-share Nifty was down by 11.55 points or 0.13% to settle at 8,774.65

Nifty September 2016 futures closed at 8808.35 on Thursday at a premium of 33.70 points over spot closing of 8,774.65, while Nifty October 2016 futures ended at 8848.50 at a premium of 73.85 points over spot closing. Nifty September futures saw addition of 0.60 million (mn) units, taking the total outstanding open interest (OI) to 33.62 million (mn) units. The near month derivatives contract will expire on September 29, 2016.

From the most active contracts, Reliance Communications September 2016 futures traded at a premium of 0.35 points at 49.35 compared with spot closing of 49.00. The numbers of contracts traded were 18,285.

State Bank of India September 2016 futures traded at a premium of 0.75 points at 252.80 compared with spot closing of 252.05. The numbers of contracts traded were 11,474.

ICICI Bank September 2016 futures traded at a premium of 0.55 points at 261.65 compared with spot closing of 261.10. The numbers of contracts traded were 15,466.

Idea Cellular September 2016 futures traded at a discount of 0.25 points at 83.00 compared with spot closing of 83.25. The numbers of contracts traded were 21,529.   

DLF September 2016 futures traded flat at 149.70. The numbers of contracts traded were 11,250.   

Among Nifty calls, 8900 SP from the September month expiry was the most active call with a addition of 0.52 million open interests. Among Nifty puts, 8700 SP from the September month expiry was the most active put with an addition of 0.03 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.83 mn) and that for Puts was at 8500 SP (6.55 mn). The respective Support and Resistance levels of Nifty are: Resistance 8805.28--- Pivot Point 8782.62--- Support --- 8751.98.             

The Nifty Put Call Ratio (PCR) finally stood at 1.22 for September month contract. The top five scrips with highest PCR on OI were BHARATFORG (1.19), TATAMOTORS (1.17), GRASIM (1.16), ULTRACEMCO (1.07) and AXISBANK (1.02).   

Among most active underlying Reliance Industries witnessed an addition of 2.43 million of Open Interest in the September month futures contract, followed Bharti Airtel witnessing an addition of 4.65 million of Open Interest in the September month contract, Axis Bank witnessed a contraction  of 0.06 million of Open Interest in the September month contract, Idea Cellular witnessed an addition  of 10.05 million of Open Interest in the September month contract and Reliance Communication witnessed an addition  of 10.79 million units of Open Interest in the September month's future contract.