Nifty snaps 8-day winning streak a day ahead of F&O expiry

Snapping its eight days winning streak, Nifty closed in the negative territory as traders booked profit after creditors rejected Greek’s proposal. Further, investors turned cautious ahead of the June derivative contracts set to expire tomorrow. On the global front, Asian stocks ended mostly higher, with the Japanese market Nikkei surging to the highest level since 1996 on signs of a pickup in economic growth, earnings optimism and hopes that Greece will avoid a debt default. However, European stock markets fell in early trade as investors focused on the unfolding negotiations surrounding Greece's debt problems.

Back home, despite beginning the session on a positive note and trading in a tight range for most part of the session, the key gauge failed to snap the session in the positive territory. The index suffered hefty bouts of profit booking in later hour of trade after Greece said that international lenders had rejected its latest proposals to end a stand-off over debt and avoid default. Greek Prime Minister Alexis Tsipras has attacked the stance of 'certain' creditors as 'strange' because they rejected proposals presented by Athens to bridge a budget gap. Greece owes the IMF 1.6 billion euros and repayment deadline is on June 30 and there was a fear that it may default on the debt without more aid. There was some concern related to monsoon too, with the weather office tempering optimism spurred by above-average rain this month, predicting that overall precipitation will fall short in the June-September period as the El Nino phenomenon brings in dry weather. However, losses remained capped Finance Minister Arun Jaitley’s statement that progress of monsoon in India has improved compared to the predictions, bettering prospects for agriculture and putting the economy on a stronger footing. Traders were seen piling up position in FMCG and Pharma stocks, while sharp selling was witnessed in PSU Bank, Metal and Realty stocks.

The top gainers from the F&O segment were Bharat Heavy Electricals, Zee Entertainment Enterprises and Aurobindo Pharma. On the other hand, the top losers were Sun TV Network, Jaiprakash Associates and Voltas. In the index options segment, maximum OI was being seen in the 8500-8400 calls and 8000-8300 puts. In today's session, while the traders preferred to exit 8000 put, heavy buildup was seen in the 8400 put. On the other hand, traders exited from 8300 Call, while 8400 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 5.80% and reached 15.91. The 50-share CNX Nifty was down by 20.70 points or 0.25% to settle at 8,360.85.  Nifty June 2015 futures closed at 8350.30 on Wednesday at a discount of 10.55 points over spot closing of 8,360.85, while Nifty July 2015 futures ended at 8369.35 at a premium of 8.50 points over spot closing. Nifty June futures saw contraction of 0.49 million (mn) units, taking the total outstanding open interest (OI) to 11.31 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 1.30 points at 262.50 compared with spot closing of 261.20. The number of contracts traded were 29,651.

HDFC Bank June 2015 futures traded at a premium of 0.55 points at 1044.75 compared with spot closing of 1,044.20. The number of contracts traded were 39,773.

Reliance Industries June 2015 futures traded at a premium of 2.90 points at 990.05 compared with spot closing of 987.15. The number of contracts traded were 45,136.

Sun Pharmaceutical Industries June 2015 futures traded at a discount of 3.25 points at 867.75 compared with spot closing of 871.00. The number of contracts traded were 35,408.

Larsen & Toubro June 2015 futures traded at a premium of 1.85 points at 1750.95 compared with spot closing of 1749.10. The number of contracts traded were 29,065.

Among Nifty calls, 8400 SP from the June month expiry was the most active call with a contraction of 0.25 million open interests.  Among Nifty puts, 8300 SP from the June month expiry was the most active put with a contraction of 0.24 million open interests.  The maximum OI outstanding for Calls was at 8400 SP (5.12 mn) and that for Puts was at 8300 SP (5.57 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8408.50 --- Pivot Point 8373.70 --- Support --- 8326.05.

The Nifty Put Call Ratio (PCR) finally stood at 1.25 for June month contract.  The top five scrips with highest PCR on OI were Maruti Suzuki (1.66), JSW Steel (1.50), Motherson Sumi Systems (1.43), Bajaj-Auto (1.39) and BHEL (1.31). 

Among most active underlying, Reliance Industries witnessed a contraction of 0.78 million of Open Interest in the June month futures contract, followed by State Bank of India witnessing a contraction of 6.29 million of Open Interest in the June month contract; ICICI Bank witnessed an addition of 0.49 million of Open Interest in the June month contract, HDFC Bank witnessed a contraction of 1.41 million of Open Interest in the June month contract and Aurobindo Pharma witnessed a contraction of 0.23 units of Open Interest in the June month's future contract.