Nifty hits 2-week low on F&O expiry

Nifty hit two-week low due to sharp selling pressure towards the end of session and closed just above the psychological level of 5,900 on the last day of July series expiry. Sentiments got dampened on world stocks fell after stronger-than-expected as US economic data raised fears that the Fed will reduce the flow of monetary stimulus to the economy if the economy continues to improve in line with its projections. Index heavyweight and cigarette major ITC witnessed a post-result slide as the company's revenue growth in Q1 June 2013 fell short of market expectations. Sentiments remained bearish after Reserve Bank of India's recent measures to support rupee. Meanwhile, investors were cautious ahead of the July F&O expiry, while a weak trend in the Asian region was dampening the trading sentiments already. The market sentiment was also hit adversely after provisional data showed that foreign funds were net sellers of Indian stocks on Wednesday, 24 July 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 404.50 crore on Wednesday, 24 July 2013, as per provisional data from the stock exchanges.

Selling got intensified as European markets made a poor start, as investors trod cautiously before German and British data, which are expected to add weight to signs that the continent’s economy is reviving. While, all Asian markets went home in red and with Japanese markets declining over a percentage point, led by over a 6% fall in shares of the camera maker Canon after it lowered sales forecasts by 10 per cent late Wednesday.

Extending the southward journey, the index traded lower in early deals pressurized by weak global cues and sentiments remaining bearish after the Reserve Bank of India's recent measures to support rupee. The index extended early losses and were trading near the lowest point in the afternoon session.  In last leg the index dropped even more following the expiry of July derivative contracts weighed down by profit taking in FMCG shares after recent gains.

Meanwhile, sectoral indices on the NSE made a negative closing. CNX Media up by 2.97%, CNX Auto up by 0.25% and CNX IT up by 0.12% remained the top gainers in the trade. While, CNX FMCG down by 3.40%, CNX MNC down by 2.69%, CNX Commodities down 2.04%, CNX Pharma down by 1.75% and CNX Metal by 1.69% were the loser in the trade.The India VIX witnessed contraction 1.12% at 16.72 as compared to its previous close of 16.91 on Wednesday. The 50-share CNX Nifty lost 83.00 points or 1.39% to settle at 5,907.50.

Nifty August 2013 futures closed at 5943.90 on Thursday at a premium of 36.40 points over spot closing of 5,907.50, while Nifty September 2013 futures ended at 5975.50 at a premium of 68.00 points over spot closing. Nifty August futures saw an addition of 3.29 million (mn) units taking the total outstanding open interest (OI) to 18.00 mn units. The near month August 2013 derivatives contract will expire on August 29, 2013.

From the most active contracts, Yes Bank August 2013 futures last traded at a premium of 3.85 points at 377.90 compared with spot closing of 374.05. The number of contracts traded was 23,096.

ICICI Bank August 2013 futures last traded at a premium of 8.95 points at 944.95 compared with spot closing of 936.00. The number of contracts traded was 19,872.

SBI August 2013 futures were at a premium of 13.25 points at 1815.25 compared with spot closing of 1802.00. The number of contracts traded was 36,109. 

Among Nifty calls, 6,000 SP from the Aug month expiry was the most active call with an addition of 1.20 million open interest.

Among Nifty puts, 5,900 SP from the Aug month expiry was the most active put with an addition of 0.84 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (3.26 mn) and that for Puts was at 5,900 SP (3.74 mn).

The respective Support and Resistance levels of Nifty are: Resistance 5966.63 -- Pivot Point 5931.52 -- Support-- 5872.38.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.15 for Aug-month contract. The top five scrips with highest PCR on OI were Syndi Bank 4.00, Raymond 2.25, PNB 1.66, Infosys 1.61 and Adani Power 1.44.

Among most active underlying, Jaiprakash Associates witnessed contraction of 20.24 million of Open Interest in the Aug month futures contract followed by Unitech which witnessed contraction of 18.64 million of Open Interest in the near month contract; IFCI witnessed contraction of 15.51 million in the Aug month futures. Also, R Com witnessed contraction of 7.63 million in Open Interest in the Aug month contract and Reliance Power witnessed contraction of 8.42 million of Open Interest in the near month futures contract.