Bears struck back with a bang on Thursday and Nifty ended the day’s trade with a fall of over 150 points breaching its crucial 8000 level as funds and retail investors engaged in reducing positions. Depreciating rupee coupled with firming crude prices has hurt the sentiments. On the global front, Asian markets closed mostly in green, encouraged by gains on Wall Street, while the New Zealand dollar tumbled to a five-year low after the central bank cut interest rates for the first time in four years. Further, European shares climbed, with the automobile sector rising on positive company updates while Greek shares bounced higher on renewed expectations of a resolution to its debt problems.
The benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. However, the index dropped into the red terrain sooner than later, as selling by foreign investors continued amid worries that a likely weak monsoon may delay key reforms and further cuts in borrowing costs. Overseas investors have sold nearly $112 million worth of cash shares in June so far, adding to the $902.38-million worth shares sold in the previous month amid worries over slow reforms and retrospective taxes. The fall was mostly seen in banking shares as bank recapitalization is taking time, and with rising sticky loans the market is worried that NPA levels could flare up. IT and tech gauges too lost heavily, despite the weakness in rupee. Traders have overlooked the positive economic data of CAD narrowing to $1.3 billion or 0.2% of the GDP in the March quarter, as the Reserve Bank of India (RBI) showed that the CAD was actually a shade higher than $1.2 billion that was recorded in the fourth quarter of 2013-14, on year-on-year basis. Although, nifty traded in a small range near its crucial 8,050 mark till early afternoon trades, but the selling pressure accentuated in the late afternoon as investors took to across the board selling after Deputy Governor S S Mundra’s statement that a planned $1.2 billion capital infusion by the government into state-run lenders during the fiscal year to March 2016 will not be enough. Besides, cautiousness ahead of Index of Industrial Production (IIP) data for April and Consumer Price Index (CPI) data for May scheduled to be released tomorrow too was keeping market-participants on the tenterhooks, adding to the pessimistic environment. The selling was brutal and the index closed with a loss of 159.10 points, dragging it below the crucial 8,000 level. All the sectoral indices on the NSE settled in the negative territory with CNX PSU bank losing the most, ending with a loss of over two and half percent followed by CNX Realty down by 2.45% and CNX Auto down by 2.41%.
The top gainers from the F&O segment were Dish TV India, Bajaj Finance and CEAT. On the other hand, the top losers were Jindal Steel & Power, Unitech and Shriram Transport Finance Company. In the index options segment, maximum OI was being seen in the 8500-8400 calls and 8000-7800 puts. In today’s session, while the traders preferred to exit 8200 put, heavy buildup was seen in the 7600 put. On the other hand, traders exited from 8600 Call, while 8200 call witnessed considerable OI addition.
The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 4.25% and reached 17.80. The 50-share CNX Nifty was down by 159.10 points or 1.96% to settle at 7,965.35. Nifty June 2015 futures closed at 7959.20 on Thursday at a discount of 6.15 points over spot closing of 7,965.35, while Nifty July 2015 futures ended at 7993.25 at a premium of 27.90 points over spot closing. Nifty June futures saw an addition of 1.18 million (mn) units, taking the total outstanding open interest (OI) to 16.59 million (mn) units. The near month derivatives contract will expire on June 25, 2015.
From the most active contracts, State Bank of India June 2015 futures traded at a premium of 0.35 points at 254.45 compared with spot closing of 254.10. The number of contracts traded were 26,912.
ICICI Bank June 2015 futures traded at a premium of 0.10 points at 289.10 compared with spot closing of 289.00. The number of contracts traded were 25,018.
HDFC Bank June 2015 futures traded at a premium of 3.55 points at 999.35 compared with spot closing of 995.80. The number of contracts traded were 25,601.
Tata Motors June 2015 futures traded at a discount of 0.35 points at 430.20 compared with spot closing of 430.55. The number of contracts traded were 22,494.
Reliance Industries June 2015 futures traded at a premium of 2.15 points at 879.65 compared with spot closing of 877.50. The number of contracts traded were 27,909.
Among Nifty calls, 8200 SP from the June month expiry was the most active call with an addition of 1.27 million open interests. Among Nifty puts, 8000 SP from the June month expiry was the most active put with a contraction of 0.41 million open interests. The maximum OI outstanding for Calls was at 8200 SP (5.10 mn) and that for Puts was at 8,000 SP (4.28 mn). The respective Support and Resistance levels of Nifty are: Resistance 8099.52— Pivot Point 8028.88— Support — 7894.72.
The Nifty Put Call Ratio (PCR) finally stood at 0.77 for June month contract. The top five scrips with highest PCR on OI were UBL (1.20), JSW Steel (1.17), BEL (0.97), BHEL (0.93) and REC (0.91).
Among most active underlying, Dish TV India witnessed an addition of 0.87 million of Open Interest in the June month futures contract, followed by State Bank of India witnessing a contraction of 0.03 million of Open Interest in the June month contract; Reliance Industries witnessed an addition of 0.47 million of Open Interest in the June month contract, ICICI Bank witnessed an addition of 0.01 million of Open Interest in the June month contract and Axis Bank witnessed a contraction of 1.18 million of Open Interest in the June month’s future contract.