Weak global cues drag Nifty below 8750 mark

Indian benchmark index --Nifty-- finished the session in negative territory on Monday with a cut of over one and half percent amid weak global cues. After a gap down opening, market traded in red through the session to end near intraday lows, as sentiment remained down beat after a prominent US policy maker hinted at a rate hike by the US Fed in the near future. Boston Fed President Eric Rosengren, known to be a dovish policymaker, stated that the US central bank faced increasing risk if it waited too long to raise interest rates. Investors also remained on sidelines ahead of macroeconomic data - IIP for July and inflation data for August - scheduled to be released later in the day. Besides, weakness in Indian rupee against the dollar too dampened sentiment. The rupee weakened by twenty five paise to trade at 66.93 against the US dollar at the time of equity markets closing due to fresh buying of the American currency by banks and importers. Investors shrugged off report that net indirect tax collections in the April-August period grew 27.5 percent to Rs 3.36 lakh crore on the back of surge in excise collections. The collection till August 2016 showed that 43.2 percent of the annual budget target of indirect taxes, which includes Central Excise, Service Tax and Customs, has been achieved. Finally, Nifty ended the session with a cut of over one hundred and fifty points, breaching its crucial 8,750 mark.

On global front, European stocks were trading red, as investor sentiment was rattled by concerns that the US Federal Reserve could be considering an imminent interest rate hike, while Asian markets ended lower, as investors were spooked by rising bond yields and talk the Federal Reserve might be serious about lifting US interest rates as early as next week.

The top gainers from the F&O segment were Strides Shasun, Infosys and Oracle Financial Services Software. On the other hand, the top losers were HDIL, Hindalco Industries and DLF. In the index options segment, maximum OI was being seen in the 8700-9000 calls and 8600-8800 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 15.19% and reached 15.24. The 50-share Nifty was down by 151.10 points or 1.70% to settle at 8,715.60

Nifty September 2016 futures closed at 8742.35 on Monday at a premium of 26.75 points over spot closing of 8,715.60, while Nifty October 2016 futures ended at 8782.35 at a premium of 66.75 points over spot closing. Nifty September futures saw contraction of 0.62 million (mn) units, taking the total outstanding open interest (OI) to 32.80 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 0.45 points at 254.10 compared with spot closing of 253.65. The numbers of contracts traded were 14,710.

ICICI Bank September 2016 futures traded at a premium of 1.60 points at 269.45 compared with spot closing of 267.85. The numbers of contracts traded were 15,398.

DLF Industries September 2016 futures traded at a premium of 0.15 points at 145.65 compared with spot closing of 145.50. The numbers of contracts traded were 10,829.

Vedanta September 2016 futures traded at a discount of 0.85 points at 162.15 compared with spot closing of 163.00. The numbers of contracts traded were 17,606.   

Axis Bank September 2016 futures traded at a premium of 0.60 points at 595.10 compared with spot closing of 594.50. The numbers of contracts traded were 13,325.    Among Nifty calls, 9000 SP from the September month expiry was the most active call with a contraction of 0.90 million open interests. Among Nifty puts, 8700 SP from the September month expiry was the most active put with an contraction of 1.05 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.73 mn) and that for Puts was at 8600 SP (5.75 mn). The respective Support and Resistance levels of Nifty are: Resistance 8741.90--- Pivot Point 8720.65--- Support --- 8694.35.             

The Nifty Put Call Ratio (PCR) finally stood at 1.19 for September month contract. The top five scrips with highest PCR on OI were MRF (8.00), MARUTI (1.15), BHARTIARTL (1.03), GODREJCP (1.00) and CENTURYTEX (0.99).   

Among most active underlying Yes Bank witnessed an addition of 0.56 million of Open Interest in the September month futures contract, followed Vedanta witnessing an addition of 5.26 million of Open Interest in the September month contract, State Bank of India witnessed a contraction  of 1.40 million of Open Interest in the September month contract, Tata Steel witnessed an addition  of 0.41 million of Open Interest in the September month contract and Reliance Industries witnessed an contraction  of 1.21 million units of Open Interest in the September month's future contract.