Weak global cues drag Nifty below 8900 mark

Friday’s session turned out to be a daunting session of trade for Nifty which ended with a cut of almost one percent amid weak global cues. After a negative opening, market traded in red terrain and never looked confident during the session to end near intraday lows, on reports of a nuclear test in North Korea and amid uncertainty over the European Central Bank’s (ECB) future policy steps. Also traders remained on sidelines ahead of IIP data due to be released later in the day. Selling got intensified in last leg of trade with the report that the country-wide monsoon deficit stood at 4% with northeastern and eastern states reporting 13% less rains from June 1 to September 7, 2016. India mostly remained dry during last week, with many areas receiving scanty rainfall. June witnessed a rain deficiency of 11%, while July had 7% of surplus rainfall. August again witnessed a dip of 9.7%. Investors shrugged off report the President Pranab Mukherjee giving his assent to the landmark Goods and Services Tax (GST) Bill. Now the Centre will have to pass the Central GST and Integrated GST Bills, while the states will need to approve their respective GST legislations. The government targets to implement the GST system from 1 April, 2017.

On global front, European counters were trading in red, driven by German trade figures that cast doubt on the strength of the euro zone’s largest economy and lingering disappointment after the European Central Bank’s policy meeting the previous day. Asian markets ended mostly lower, while Japan stocks ended higher as gains in the transport, mining and shipbuilding sectors led shares higher.

The top gainers from the F&O segment were IDBI Bank, Adani Power and Century Textiles & Industries. On the other hand, the top losers were Steel Authority of India, CESC and Bharat Financial Inclusion. In the index options segment, maximum OI was being seen in the 8800-9100 calls and 8600-8900 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 0.88% and reached 13.23. The 50-share Nifty was down by 85.80 points or 0.96% to settle at 8,866.70

Nifty September 2016 futures closed at 8903.75 on Friday at a premium of 37.05 points over spot closing of 8,866.70, while Nifty October 2016 futures ended at 8943.10 at a premium of 76.40 points over spot closing. Nifty September futures saw contraction of 0.91 million (mn) units, taking the total outstanding open interest (OI) to 33.43 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 1.60 points at 265.30 compared with spot closing of 263.70. The numbers of contracts traded were 12,803.

ICICI Bank September 2016 futures traded at a premium of 1.35 points at 275.35 compared with spot closing of 274.00. The numbers of contracts traded were 12,595.

Punjab National Bank Industries September 2016 futures traded at a premium of 0.30 points at 145.50 compared with spot closing of 145.20. The numbers of contracts traded were 13,011.

Axis Bank September 2016 futures traded at a premium of 2.65 points at 616.20 compared with spot closing of 613.55. The numbers of contracts traded were 15,026.   

Sun Pharmaceuticals September 2016 futures traded at a premium of 4.55 points at 799.40 compared with spot closing of 794.85. The numbers of contracts traded were 18,336.   

Among Nifty calls, 9000 SP from the September month expiry was the most active call with a addition of 1.04 million open interests. Among Nifty puts, 8900 SP from the September month expiry was the most active put with an contraction of 0.06 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.63 mn) and that for Puts was at 8600 SP (5.81 mn). The respective Support and Resistance levels of Nifty are: Resistance 8917.67--- Pivot Point 8888.18--- Support --- 8837.22.             

The Nifty Put Call Ratio (PCR) finally stood at 1.33 for September month contract. The top five scrips with highest PCR on OI were MRF (8.00), MARUTI (1.38), TATAMOTORS (1.12), BHARTIARTL (1.11) and CENTURYTEX (1.03).   

Among most active underlying Yes Bank witnessed an contraction of 0.31 million of Open Interest in the September month futures contract, followed Reliance Industries witnessing an addition of 0.51 million of Open Interest in the September month contract, State Bank of India witnessed a contraction  of 0.03 million of Open Interest in the September month contract, Reliance Infrastructure witnessed an addition  of 0.56 million of Open Interest in the September month contract and Punjab National Bank witnessed an addition  of 0.25 million units of Open Interest in the September month's future contract.