Nifty snaps the volatile session marginally in red

Nifty ended a very volatile session on a marginally negative note, unable to protect its psychologically crucial bastion of 8400 reached in intraday trade. The benchmark made a soft start despite an expectation of a follow up rally from last session on good global cues, as traders taking a cautious approach opted to book profit. There was some concern with SBI’s Monthly Composite Index, a leading indicator for manufacturing activity in Indian Economy, inching up from 46.8 in April 2015 to 53.8 in May 2015, however cautioning that going ahead “weak demand conditions” may persist that could have a negative impact on the industrial output numbers.

Markets lacked any supportive cues in the early morning that could support their upmove, but things started stablising towards the mid of the day and eventually, Nifty entered the green supported by realty, IT and consumer durable stocks, the gains took the index above the 8400 mark, but in the final hours sudden selling emerged into the markets and dragged the index in the red, there were some futile attempts in the final moments but that could not help the Nifty to end in green, finally snapping the session with cut of 0.10%.

The top gainers from the F&O segment were Hero Motocorp, UltraTech Cement and Zee Entertainment. On the other hand, the top losers were HDFC, Tata Motors and ONGC. In the index options segment, maximum OI is being seen in the 8400-8600 calls and 8000-8200 puts. In today's session, while the traders preferred to exit 7900 put, heavy buildup was seen in the 8300 put. On the other hand, traders exited from 8200 Call, while 8500 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.05% and reached 18.27. The 50-share CNX Nifty was down by 8.00 points or 0.10% to settle at 8,365.65.

Nifty May 2015 futures closed at 8366.30 on Tuesday at a premium of 0.65 points over spot closing of 8,365.65, while Nifty June 2015 futures ended at 8,394.80 at a premium of 29.15 points over spot closing. Nifty May futures saw contraction of 0.02 million (mn) units, taking the total outstanding open interest (OI) to 13.60 million (mn) units. The near month derivatives contract will expire on May 28, 2015.

From the most active contracts, State Bank of India May 2015 futures traded at a discount of 1.85 points at 286.15 compared with spot closing of 288.00. The number of contracts traded were 23,080.

ICICI Bank May 2015 futures traded at a premium of 0.30 points at 315.70 compared with spot closing of 315.40. The number of contracts traded were 21,984.

HDFC Bank May 2015 futures traded at a premium of 1.05 points at 1008.30 compared with spot closing of 1007.25. The number of contracts traded were 23,552.

Reliance Industries May 2015 futures traded at a premium of 0.85 points at 895.85 compared with spot closing of 895.00. The number of contracts traded were 26,738.

Axis Bank May 2015 futures traded at a premium of 3.00 points at 563.45 compared with spot closing of 560.45.

The number of contracts traded were 26,161.Among Nifty calls, 8500 SP from the May month expiry was the most active call with an addition of 0.97 million open interests. Among Nifty puts, 7900 SP from the May month expiry was the most active put with a contraction of 0.83 million open interests. The maximum OI outstanding for Calls was at 8500 SP (5.66 mn) and that for Puts was at 8,000 SP (5.63 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8417.30 --- Pivot Point 8376.15 --- Support --- 8324.50.

The Nifty Put Call Ratio (PCR) finally stood at 1.06 for May month contract. The top five scrips with highest PCR on OI were Eicher Motors (1.87), Dr. Reddy's Laboratories (1.68), Hero MotoCorp (1.56), Adani Enterprises (1.48) and Union Bank of India (1.44). 

Among most active underlying, SBI witnessed an addition of 1.05 million of Open Interest in the May month futures contract, followed by ICICI Bank witnessing an addition of 1.53 million of Open Interest in the May month contract; Infy witnessed a contraction of 0.26 million of Open Interest in the May month contract, Reliance Industries witnessed an addition of 0.17 million of Open Interest in the May month contract and Axis Bank witnessed an addition of 0.44 million of Open Interest in the May month's future contract.