Nifty snaps May F&O series with a gain of over 5.7%

The domestic index CNX Nifty finished the May F&O series with a gain of about 395 points or 5.77%, after gaining over 3% in April series. Today, Nifty snapped the day’s trade with a cut of over a percentage point. Market traded range bound till mid afternoon but witnessed a drastic fall in last leg of trade tracking downtick in European counterparts. About 7 percent drop in index heavyweight Infosys in early trade on domestic front too dampened the sentiments and market ended below its crucial 7,250 mark. Sentiment also weakened as foreign institutional investors (FIIs) continued to remain net seller of Indian equities over the past three sessions. Further, amidst across the board selling pressure, only stocks of defensive Healthcare counters managed to show some resilience, while massive selling was witnessed in IT, TECK and Oil & Gas sector stocks.

In the index option segment, maximum OI in June series to be seen in the 7500-7400 calls and 7100-7000 puts indicating this as the trading range expectation. Meanwhile, many traders rolled over positions in the futures & options (F&O) segment from the May 2014 series to June 2014 series. Sectorally, capital goods, infrastructure and cement stocks are witnessing high rollover of positions while stocks from the automobile, technology and telecom space are witnessing relatively low rolls into the June series. Now the May F&O series ended, traders were awaiting Q1 economic growth data due on Friday and the Reserve Bank of India’s (RBI) bi-monthly monetary policy review due out on Tuesday, which will be next triggers for the market. India VIX - the gauge of underlying volatility in the market - has declined for second consecutive day as traders turned cautious on the last day of May F&O series. The top gainers from the F&O segment were UCO Bank, Bank of India and Allahabad Bank. The top losers were Jain Irrigation Systems, Tata Global Beverages and Adani Enterprises.

Most of the sectoral indices on the NSE were settled in the red, CNX IT down by 3.35%, CNX Energy down by 1.35%, CNX Realty down by 1.20%, CNX Finance down by 1.01%, Bank Nifty down by 0.94%, CNX Metal down by 0.87% and CNX FMCG down by 0.43%, while CNX Media up by 0.65%, CNX Pharma up by 0.24%, CNX PSU Bank up by 0.13% and CNX Auto up by 0.01% were the gainers on the NSE sectoral indices.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 4.94% and reached 16.69. The 50-share CNX Nifty decreased by 94.00 points or 1.28% to settle at 7,235.65. Nifty June 2014 futures closed at 7265.70 on Thursday at a premium of 30.05 points over spot closing of 7,235.65, while Nifty July 2014 futures ended at 7301.35 at a premium of 65.70 points over spot closing. Nifty June futures saw an addition of 4.03 million (mn) units, taking the total outstanding open interest (OI) to 15.39 mn units. The near month June 2014 derivatives contract will expire on June 26, 2014.

From the most active contracts, HDFC Bank June 2014 futures were at a premium of 5.50 points at 815.55 compared with spot closing of 810.05. The number of contracts traded was 36,265.

Reliance Industries June 2014 futures traded at a premium of 3.05 points at 1082.05 compared with spot closing of 1079.00. The number of contracts traded was 30,929.

ICICI Bank June 2014 futures were at a discount of 20.05 points at 1426.15 compared with spot closing of 1446.20. The number of contracts traded was 32,428.

SBI June 2014 futures traded at a premium of 26.50 points at 2621.85 compared with spot closing of 2595.35. The number of contracts traded was 36,580.

Infosys June 2014 futures traded at a premium of 28.35 points at 2949.65 compared with spot closing of 2921.30. The number of contracts traded was 30,673.

Among Nifty calls, 7,500 SP from the June month expiry was the most active call with an addition of 0.92 million open interest. Among Nifty puts, 7,000 SP from the  June month expiry was the most active put with an addition of 0.49 million open interest. The maximum OI outstanding for Calls was at 7,500 SP (4.24 mn) and that for Puts was at 7,000 SP (3.06 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7299.23 --- Pivot Point 7261.82--- Support --- 7198.23.

The Nifty Put Call Ratio (PCR) finally stood at 0.84 for June month contract. The top five scrips with highest PCR on OI were Divis Lab 2.86, IOC 1.41, COLPAL 1.25, Siemens 1.10 and UBL 1.00.

Among most active underlying, SBI witnessed contraction of 1.18 million of Open Interest in the June month futures contract, followed by HDFC Bank witnessing   an addition  of 9.55 million of Open Interest in the June  month contract; while Reliance Industries witnessed   an addition of 3.67 million of Open Interest in the June month futures contract, ICICI Bank of India witnessed  an addition 3.82 million of Open Interest in the June month contract and United Spirits witnessed contraction  of 0.73 million  of Open Interest in the June month's future contract.