Nifty ends rangebound day of trade with slender loss

Nifty opening on a positive note and trading in a narrow range for most part of the day ended the session marginally in the red as investors remained on sidelines ahead of tomorrow's monthly expiry in the derivatives segment. Sentiments got a hit as UNCTAD's World Investment Report 2014 stated that India has slipped by one place to the fourth position in latest ranking of most favoured destinations for investment by global corporations. Moreover, global sentiment remained dampened due to escalating tension in Iraq, which threatened to push up Brent crude prices offsetting the impact of buying equities by foreign investors. However, market losses remained capped on report that foreign institutional investors (FIIs) bought shares worth a net Rs 284.61 crore on June 24, 2014.

After opening on a positive note, index was trading in a narrow 33-point range, alternating between positive and negative territory for most part of the day as stocks from Power, Consumer Durables and Metal counters were supporting the markets’ uptrend, while those from Oil and Gas, FMCG and Banking counters were adding to the underlying cautious undertone. Finally, Nifty ended the session slightly in the negative terrain with a loss of just over ten points.

Nifty is likely to remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month June 2014 series to July 2014 series, while movement in crude oil prices linked to the Iraq unrest and the progress of monsoon will set the tone this week. Looking at the index option data for June series maximum call OI is seen at 7700 followed by 7600 strike prices whereas maximum put OI is at 7500 & 7400 strike prices suggesting broader range is likely in between 7500-7700 levels. The top gainers from F&O Securities were Syndicate Bank, India Cements and Petronet LNG. The top losers were ITC, Kotak Mahindra Bank and United Spirits. Meanwhile, India VIX - the gauge of underlying volatility in the market - has declined in today's session as traders remained on sidelines ahead of tomorrow's monthly expiry in the derivatives segment.

Most of the sectoral indices on the NSE were settled in the green, CNX Realty up by 0.99%, CNX Auto up by 0.96%, CNX Pharma up by 0.57%, CNX Media up by 0.51%, CNX PSU Bank up by 0.44% and CNX IT up by 0.18%, while Bank Nifty down by 0.47%, CNX Energy up by 0.41%, CNX Finance down by 0.26%, CNX FMCG declined by 0.25% and CNX Metal down by 0.07%, remained the losers in the trade.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 4.56% and reached 18.31. The 50-share CNX Nifty decreased by 10.95 points or 0.14% to settle at 7,569.25. Nifty June 2014 futures closed at 7574.90 on Wednesday at a premium of 5.65 points over spot closing of 7,569.25, while Nifty July 2014 futures ended at 7607.65 at a premium of 38.40 points over spot closing. Nifty June futures saw contraction of 2.09 million (mn) units, taking the total outstanding open interest (OI) to 9.26 mn units. The near month derivatives contract will expire on June 26, 2014.

From the most active contracts, HDFC Bank June 2014 futures traded at a premium of 0.15 points at 825.05 compared with spot closing of 824.90. The number of contracts traded were 24,000.

Reliance Communications June 2014 futures traded at a premium of 0.45 points at 151.95 compared with spot closing of 151.50. The number of contracts traded were 27,019.

Reliance Industries June 2014 futures traded at a premium of 2.85 points at 1051.50 compared with spot closing of 1048.65. The number of contracts traded were 32,940.

ICICI Bank June 2014 futures were at a premium of 6.60 points at 1,424.70 compared with spot closing of 1,418.10. The number of contracts traded were 20,939.

SBI June 2014 futures were at a premium of 3.00 points at 2,692.00 compared with spot closing of 2,689.00. The number of contracts traded were 34,296.

Among Nifty calls, 7,600 SP from the June month expiry was the most active call with an addition of 0.61 million open interests. Among Nifty puts, 7,600 SP from the June month expiry was the most active put with a contraction of 0.37 million open interests. The maximum OI outstanding for Calls was at 7700 SP (8.05 mn) and that for Puts was at 7,500 SP (6.82 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7586.65 --- Pivot Point 7571.85 --- Support --- 7554.45.

The Nifty Put Call Ratio (PCR) finally stood at 1.01 for June month contract. The top five scrips with highest PCR on OI were Mcleod Russel India (1.73), Aurobindo Pharma (1.58), Asian Paint (1.46), Gail (1.37) and TCS (1.29).

Among most active underlying, State Bank of India witnessed a contraction of 1.22 million of Open Interest in the June month futures contract, followed by Tata Motors witnessing a contraction of 6.53 million of Open Interest in the June  month contract; while Reliance Capital witnessed a contraction of 3.79 million of Open Interest in the June month futures contract, Reliance Communications witnessed an addition 6.13 million of Open Interest in the June month contract and HDFC Bank witnessed a contraction of 7.59 million of Open Interest in the June month's future contract.