Weak global cues drag Nifty below 8,750 level

Indian benchmark index -- Nifty-- finished the session in negative territory on Monday with a cut of over a one percent amid weak global cues. After a gap down opening, market never looked confident throughout the session and ended not only at intraday lows but near one month lows, as investors remained on sidelines upcoming monetary policy review on October 4, the first to be held under newly appointed Reserve Bank of India (RBI) Governor Urjit Patel, amid expectations of a 25 basis point cut in the repo rate. Traders also stayed away from investing in risky assets ahead of September futures & options (F&O) expiry on Thursday this week. Market participants failed to get any sense of relief with Niti Aayog Vice-Chairman Arvind Panagariya’s statement that a good monsoon, reforms and timely decision making at the Centre will definitely push India’s growth beyond the 8 per cent mark in subsequent quarters of this fiscal. Finally, Nifty ended the session with a cut of over hundred points, breaching its crucial 8,750 mark.

On the global font, all the Asian markets ended lower, as investors awaited Monday evening’s US presidential debate between Donald Trump and Hillary Clinton, which will take place early on Tuesday in Asian time zones. European markets were trading sluggish on Monday, as investors remained cautious ahead of an Organization of the Petroleum Exporting Countries (OPEC) producers meeting in Algeria this week.

The top gainers from the F&O segment were BPCL, Wockhardt and Hindustan Petroleum Corporation. On the other hand, the top losers were IFCI, ONGC and Jubilant Foodworks. 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 9.95% and reached 14.56. The 50-share Nifty was down by 108.50 points or 1.23% to settle at 8,723.05

Nifty September 2016 futures closed at 8735.15 on Monday at a premium of 12.10 points over spot closing of 8,723.05, while Nifty October 2016 futures ended at 8781.70 at a premium of 58.65 points over spot closing. Nifty September futures saw contraction of 6.34 million (mn) units, taking the total outstanding open interest (OI) to 24.99 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 0.30 points at 252.20 compared with spot closing of 251.90. The numbers of contracts traded were 16,817.

ICICI Bank September 2016 futures traded at a premium of 0.30 points at 263.30 compared with spot closing of 263.00. The numbers of contracts traded were 19,422.

Axis Bank September 2016 futures traded at a premium of 2.10 points at 549.10 compared with spot closing of 547.00. The numbers of contracts traded were 22,470.

Tata Motors September 2016 futures traded at a premium of 1.40 points at 537.20 compared with spot closing of 535.80. The numbers of contracts traded were 15,327.   

Sun Pharmaceuticals September 2016 futures traded at a premium of 2.65 points at 768.20 compared with spot closing of 765.55. The numbers of contracts traded were 12,851.    Among Nifty calls, 8800 SP from the September month expiry was the most active call with a addition of 1.76 million open interests. Among Nifty puts, 8800 SP from the September month expiry was the most active put with an contraction of 1.39 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.52 mn) and that for Puts was at 8500 SP (5.97 mn). The respective Support and Resistance levels of Nifty are: Resistance 8783.37--- Pivot Point 8749.23--- Support --- 8688.92.             

The Nifty Put Call Ratio (PCR) finally stood at 1.18 for September month contract. The top five scrips with highest PCR on OI were MRF (3.00), EICHERMOT (2.58), MARUTI (1.53), CEATLTD (1.21) and CENTURYTEX (1.14).   

Among most active underlying Reliance Industries witnessed an contraction of 4.20 million of Open Interest in the September month futures contract, followed Axis Bank witnessing an contraction of 4.20 million of Open Interest in the September month contract, Yes Bank witnessed a contraction  of 0.81 million of Open Interest in the September month contract, State Bank of India witnessed an contraction  of 13.85 million of Open Interest in the September month contract and Tata Motors witnessed an contraction  of 5.18 million units of Open Interest in the September month's future contract.