Nifty snaps three days gaining steak; settles below 8750 mark

Snapping its three days winning streak, Indian benchmark index --Nifty-- finished the session in negative territory on Wednesday amid weak global cues. After positive start, market entered into red terrain and never looked confident during the session to end near intraday lows, as sentiment remained down beat with the report that Nikkei India Services Business Activity Index eased to 52 in September from 54.7 in August, pointing to a slower and moderate rate of expansion. Market participants remained concerned with World Bank research predicting that the proportion of jobs threatened in India by automation is 69 per cent and in China it is 77 per cent. Beside, India Meteorological Department’s statement that spillover of monsoon into October has led to crop damage in many areas too dampened sentiment. Also, traders shrugged off International Monetary Fund’s (IMF) report where it raised India’s growth forecast a tad, citing the resilience of its economy and robust growth momentum. The IMF now expects the economy to expand 7.6% in 2016-17, up from its earlier projection of 7.4%. Finally, Nifty ended the session with a cut of over quarter a percent, breaching its crucial 8,750 mark.

On the global front, European markets declined in early trade on concerns that European Central Bank might reduce the pace of bond buying before its purchase programme ends, hitting utilities and real estate stocks hardest. Asian markets ended in green on Wednesday, as comments from Federal Reserve officials strengthened expectations of a rate hike by the Fed within this year.

The top gainers from the F&O segment were Tata Global Beverages, Kaveri Seed Company and Tata Communications. On the other hand, the top losers were IDFC Bank, CESC and ONGC. 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 contraction by 0.45% and reached 14.92. The 50-share Nifty was down by 25.20 points or 0.29% to settle at 8,743.95

Nifty October 2016 futures closed at 8775.35 on Wednesday at a premium of 31.40 points over spot closing of 8,743.95, while Nifty November 2016 futures ended at 8814.95 at a premium of 71 points over spot closing. Nifty September futures saw addition of 0.10 million (mn) units, taking the total outstanding open interest (OI) to 22.29 million (mn) units. The near month derivatives contract will expire on October 27, 2016.

From the most active contracts, State Bank of India October 2016 futures traded at a premium of 1.35 points at 261.35 compared with spot closing of 260.00. The numbers of contracts traded were 18,392.

ICICI Bank October 2016 futures traded at a premium of 0.80 points at 256.20 compared with spot closing of 255.40. The numbers of contracts traded were 10,958.

DLF October 2016 futures traded at a premium of 1.95 points at 159.60 compared with spot closing of 157.65. The numbers of contracts traded were 12,630.

Bank of Baroda October 2016 futures traded at a premium of 1.50 points at 170.25 compared with spot closing of 168.75. The numbers of contracts traded were 11,092.   

Vedanta October 2016 futures traded at a premium of 1.70 points at 192.40 compared with spot closing of 190.70. The numbers of contracts traded were 10,929.     Among Nifty calls, 8800 SP from the October month expiry was the most active call with a addition of 0.31 million open interests. Among Nifty puts, 8700 SP from the October month expiry was the most active put with an addition of 0.32 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.89 mn) and that for Puts was at 8500 SP (4.21 mn). The respective Support and Resistance levels of Nifty are: Resistance 8790.13--- Pivot Point 8760.77--- Support --- 8714.58.             

The Nifty Put Call Ratio (PCR) finally stood at 1.03 for October month contract. The top five scrips with highest PCR on OI were MRF (4.00), OFSS (2.00), APOLLOHOSP (1.67), M&M (1.14) and BPCL (1.10).   

Among most active underlying SBI witnessed an contraction of 2.48 million of Open Interest in the October month futures contract, followed Vedanta witnessing an addition of 1.36 million of Open Interest in the October month contract, Tata Motors witnessed a contraction  of 0.03 million of Open Interest in the October month contract, Reliance Infrastructure witnessed an addition  of 0.76 million of Open Interest in the October month contract and DLF witnessed an addition  of 4.41 million units of Open Interest in the October month's future contract.