Profit booking drags Nifty lower; holds 8,900 mark

Indian benchmark -- Nifty -- ended the volatile day of trade in red on Wednesday, as traders opted to book profit after yesterday’s huge rally. Market traded cautiously throughout the session near its neutral line as anxiety among investors further increased after disappointing US services data reignited worries about growth in the world’s largest economy. Traders also remained on sidelines after the NITI Aayog has made a case for strategic sale in as many as 44 public sector undertakings where the government can reduce its holding below 50 per cent by selling its stake. However, losses remained capped on reports that the government has begun the groundwork for creation of a secretariat to cater to the Goods and Services Tax (GST) Council, which will be constituted after Presidential assent for the Constitution Amendment Bill enabling implementation of the proposed tax. Selling in last leg of trade dragged Nifty lower, but it managed to hold its crucial 8,900 level.

On global front, European stock markets were trading mostly in green, as investors assessing a larger-than-expected drop in German industrial production before the European Central Bank issues its next policy decision on Thursday. Asian markets ended mostly lower; with Japan’s stock market leading declines amid a soaring yen.

The top gainers from the F&O segment were BHEL, SAIL and Jain Irrigation Systems. On the other hand, the top losers were Petronet LNG, Titan Company and TV18 Broadcast. In the index options segment, maximum OI was being seen in the 8900-9000 calls and 8600-9000 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 3.10% and reached 13.14. The 50-share Nifty was down by 25.05 points or 0.28% to settle at 8,917.95

Nifty September 2016 futures closed at 8952.10 on Wednesday at a premium of 34.15 points over spot closing of 8,917.95, while Nifty October 2016 futures ended at 8992.05 at a premium of 74.10 points over spot closing. Nifty September futures saw addition of 0.10 million (mn) units, taking the total outstanding open interest (OI) to 34.00 million (mn) units. The near month derivatives contract will expire on September 29, 2016.

From the most active contracts, State Bank of India September 2016 futures traded at a premium of 0.10 points at 267.10 compared with spot closing of 267.00. The numbers of contracts traded were 26,713.

ICICI Bank September 2016 futures traded at a premium of 0.85 points at 278.85 compared with spot closing of 278.00. The numbers of contracts traded were 26,927.

BHEL September 2016 futures traded at a premium of 0.20 points at 160.10 compared with spot closing of 159.90. The numbers of contracts traded were 40,022.

Bank of Baroda September 2016 futures traded at a discount of 0.05 points at 175.05 compared with spot closing of 175.10. The numbers of contracts traded were 14,562.   

Punjab National Bank September 2016 futures traded at a premium of 0.10 points at 139.90 compared with spot closing of 139.80. The numbers of contracts traded were 18,439.   

Among Nifty calls, 9000 SP from the September month expiry was the most active call with a contraction of 0.34 million open interests. Among Nifty puts, 8900 SP from the September month expiry was the most active put with an addition of 0.59 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.54 mn) and that for Puts was at 8600 SP (6.06 mn). The respective Support and Resistance levels of Nifty are: Resistance 8953.32--- Pivot Point 8933.33--- Support --- 8897.97.             

The Nifty Put Call Ratio (PCR) finally stood at 1.38 for September month contract. The top five scrips with highest PCR on OI were MRF (8.00), MARUTI (1.48), TATAMOTORS (1.41), YESBANK (1.17) and AXISBANK (1.13).   

Among most active underlying BHEL witnessed an addition of 0.58 million of Open Interest in the September month futures contract, followed State Bank of India witnessing an contraction of 2.22 million of Open Interest in the September month contract, Tata Motors witnessed a contraction  of 0.64 million of Open Interest in the September month contract, ICICI Bank witnessed an contraction  of 1.62 million of Open Interest in the September month contract and Yes Bank witnessed an contraction  of 0.54 million units of Open Interest in the September month's future contract.