Nifty settle below 8700 mark

Indian benchmark -- Nifty -- ended the lackluster day of trade with a cut of two tenth of a percent, breaching its crucial 8,700 mark, as traders opted to remain on sidelines ahead of  October’s expiry in the derivatives segment on Thursday. Fall in Tata Group stocks after Cyrus Mistry’s removal too dragged the index lower. Market traded cautiously throughout the session in a tight band, as market participants failed to draw any sense of relief from NITI Aayog Vice-Chairman Arvind Panagariya’s statement where he has defended the Centre’s proposal for four-tier rate structure and a cess under the Goods and Services Tax and said that these would ensure less inflationary implications and lower tax rates for consumers as well as revenue predictability for the exchequer. Economic Affairs Secretary Shaktikanta Das’ statement that the revenue neutral rate structure will be decided the next month too failed to cheer market. Finally, Nifty ended the session with a cut of around twenty points.

On the global front, European stocks were trading higher, as market participants digested a deluge of earnings and celebrated positive news from Greece and the German economy. Asian markets ended mostly in red, investors remained cautious as oil prices dipped over disagreement within producer cartel OPEC on who should cut how much production in a planned coordinated reduction to prop up prices.

The top gainers from the F&O segment were Arvind, Adani Ports and The Federal Bank. On the other hand, the top losers were Adani Enterprises, Adani Power and Biocon. In the index options segment, maximum OI was being seen in the 8600-9000 calls and 8600-8700 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 1.05% and reached 14.48. The 50-share Nifty was down by 17.65 points or 0.20% to settle at 8,691.30

Nifty October 2016 futures closed at 8700.35 on Tuesday at a premium of 9.05 points over spot closing of 8,691.30, while Nifty November 2016 futures ended at 8742.45 at a premium of 51.15 points over spot closing. Nifty October futures saw contraction of 2.56 million (mn) units, taking the total outstanding open interest (OI) to 14.02 million (mn) units. The near month derivatives contract will expire on October 27, 2016.

From the most active contracts, ICICI Bank October 2016 futures traded at a discount of 0.55 points at 289.75 compared with spot closing of 290.30. The numbers of contracts traded were 26,456.

Axis Bank October 2016 futures traded at a discount of 1.25 points at 529.25 compared with spot closing of 530.50. The numbers of contracts traded were 20,656.

Adani Ports October 2016 futures traded at a premium of 3.10 points at 313.75 compared with spot closing of 310.65. The numbers of contracts traded were 28,761.

Tata Steel October 2016 futures traded at a premium of 1.60 points at 416.35 compared with spot closing of 414.75. The numbers of contracts traded were 17,799.   

Sun Pharmaceuticals October 2016 futures traded at a premium of 0.90 points at 748.85 compared with spot closing of 747.95. The numbers of contracts traded were 15,591. 

Among Nifty calls, 8700 SP from the October month expiry was the most active call with a addition of 0.44 million open interests. Among Nifty puts, 8700 SP from the October month expiry was the most active put with an contraction of 0.24 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.06 mn) and that for Puts was at 8600 SP (5.60 mn). The respective Support and Resistance levels of Nifty are: Resistance 8721.48--- Pivot Point 8692.47--- Support --- 8662.28.             

The Nifty Put Call Ratio (PCR) finally stood at 1.02 for October month contract. The top five scrips with highest PCR on OI were OFSS (2.00), ARVIND (1.46), ICICIBANK (1.44), LT (1.43) and CESC (1.20).   

Among most active underlying Arvind witnessed an addition of 1.24 million of Open Interest in the October month futures contract, followed ICICI Bank witnessing an contraction of 4.61 million of Open Interest in the October month contract, Adani Ports witnessed a contraction of 0.29 million of Open Interest in the October month contract, HDFC Bank witnessed an contraction of 8.00 million of Open Interest in the October month contract and Dr. Reddy's Laboratories witnessed an contraction  of 0.24 million units of Open Interest in the October month's future contract.