Nifty ends flat with negative bias; holds above 8,300 mark

The fifty stock index -- Nifty -- ended the choppy day of trade with a marginal cut on Wednesday on lack of fresh triggers and caution ahead of May F&O expiry due on Thursday. Besides, some investors remained on the sidelines and refrained from any buying activity ahead of gross domestic product (GDP) data, which is due on May 29 and RBI’s bi-monthly policy preview, which is due on June 2.  On the global front, Asian markets closed mostly in red, on growing prospects that the Federal Reserve was on track to raise interest rates later this year and concerns that financial woes could engulf Spain in addition to Greece. However, European stocks were back in positive territory on Wednesday, recovering from a three-day decline amid stronger-than-expected German consumer confidence and as deal momentum boosted individual stocks, including Imperial Tobacco (ITYBY).

Back home, after the subdued opening, the key index plunged to lowest point in the day as funds and retail investors engaged in reducing positions amid a weak trend in global markets. Also, there was additional pressure of weakness in rupee, which continuing its decline for the third straight day, dropped below the 64 mark, as the American currency firmed up overseas on expectation of early rate hike by the US Fed. Thereafter started the road to recovery for the index, which kept slowly but steadily moving towards the neutral line. Investors got some support with Chief Economic Advisor (CEA) Arvind Subramanian pinning hopes on adequate food grain stock helping to keep inflation under control even with below-normal monsoon  and pitching for rate cut by the Reserve Bank in its upcoming policy review to boost growth. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 114.81 crore on May 26, 2015. The key gauge even made some attempts to claw back into the green zone in early afternoon trades but profit booking at higher levels dragged the key index into deeper red. However, late short covering in blue-chip stocks and supportive leads from European markets ensured that local bourses go home with small losses. Traders were seen piling position in PSU, Banking and Oil & Gas stocks while selling was witnessed in Auto, IT and TECK sectors stocks.

The top gainers from the F&O segment were Wockhardt, Karnataka Bank and IDBI Bank. On the other hand, the top losers were Tech Mahindra, UPL and Tata Motors. In the index options segment, maximum OI is being seen in the 8500-8400 calls and 8100-8200 puts. In today's session, while the traders preferred to exit 8400 put, heavy buildup was seen in the 8200 put. On the other hand, traders exited from 8600 Call, while 8300 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 1.26% and reached 17.28. The 50-share CNX Nifty was down by 4.75 points or 0.06% to settle at 8,334.60. Nifty May 2015 futures closed at 8331.75 on Wednesday at a discount of 2.85 points over spot closing of 8,334.60, while Nifty June 2015 futures ended at 8349.2 at a premium of 14.60 points over spot closing. Nifty May futures saw a contraction of 2.14 million (mn) units, taking the total outstanding open interest (OI) to 8.60 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 3.45 points at 277.75 compared with spot closing of 281.20. The number of contracts traded were 33,120.

Tech Mahindra May 2015 futures traded at a premium of 3.55 points at 549.55 compared with spot closing of 546.00. The number of contracts traded were 39,879.

Wockhardt May 2015 futures traded at a premium of 6.40 points at 1574.6 compared with spot closing of 1,568.20. The number of contracts traded were 55,448.

Tata Motors May 2015 futures traded at a discount of 1.25 points at 471.5 compared with spot closing of 472.75. The number of contracts traded were 43,727.

HDFC Bank May 2015 futures traded at a discount of 0.65 points at 1036.4 compared with spot closing of 1,037.05. The number of contracts traded were 37,735.Among Nifty calls, 8400 SP from the May month expiry was the most active call with an addition of 0.21 million open interests. Among Nifty puts, 8300 SP from the May month expiry was the most active put with an addition of 0.60 million open interests. The maximum OI outstanding for Calls was at 8500 SP (5.39 mn) and that for Puts was at 8,300 SP (5.55 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8358.98--- Pivot Point 8318.47--- Support --- 8294.08.

The Nifty Put Call Ratio (PCR) finally stood at 1.26 for May month contract. The top five scrips with highest PCR on OI were Bajaj-Auto (2.32), Eicher Motors (2.19), Hero MotoCorp (1.94), Voltas (1.67) and Adani Enterprises (1.65). 

Among most active underlying, State Bank of India witnessed a contraction of 7.76 million of Open Interest in the May month futures contract, followed by Tata Motors witnessing a contraction of 1.40 million of Open Interest in the May month contract; Tech Mahindra witnessed a contraction of 0.44 million of Open Interest in the May month contract, Wockhardt witnessed a contraction of 0.16 million of Open Interest in the May month contract and Axis Bank witnessed an addition of 0.58 million of Open Interest in the May month's future contract.