Nifty ends flat with negative bias; holds above 8,450 mark

The local benchmark, Nifty consolidated and ended the choppy day of trade on a flat note as weakness in the rate sensitive stocks were offset by the ease in the WPI data coupled with gains in the healthcare shares. On the global front, Asian stocks closed mostly higher, with Australian and Japanese shares leading the region’s gains on easing fears about Greece’s debt crisis, while Chinese and Hong Kong stocks succumbed to selling pressure on doubts about the effectiveness of Beijing’s aggressive rescue efforts to calm markets. Further, European stocks edged lower on Tuesday after a strong four day rally, with investors unsure whether Greece would be able to get the support of its parliament behind a bailout deal designed to avert bankruptcy.

After getting cautious start, Indian equity index nifty showed some strength in afternoon trades however, it failed to breach the narrow 56-point range for most part of the day, ending the session on a flat note with negative bias. Sentiments remained down-beat as the rate cuts hope by Reserve Bank of India was dampened after retail inflation surged to eight-month high of 5.4 per cent in June, compared to 5.01 percent in May and 6.77 percent in June last year, mainly due to costlier food items. Trading sentiment was also hit after Credit Suisse downgraded Indian equities to 1 per cent ‘underweight’ from 1 per cent ‘overweight’ in its Asian portfolio, saying it was a tactical move based on valuations.  However, the easing of Wholesale Price Index (WPI) for the month of June has provided some relief to the market participants. The Wholesale Price Index (WPI) fell to -2.4% in June, continuing its deflationary mode, led by downward fuel prices and lower commodity prices. Some support also came with India Ratings retaining its 7.7 percent growth forecast for this year but calling for continuous government interventions to fill the deficits in physical and social infrastructure spaces for long-term higher growth. Traders were seen piling position in IT, Metal and TECK stocks while selling was witnessed in Auto, Realty and Banking sector stocks. 

The top gainers from the F&O segment were Jaiprakash Associates, JSW Energy and Jaiprakash Power Ventures. On the other hand, the top losers were Tata Motors, India Cements and Indiabulls Real Estate. In the index options segment, maximum OI was being seen in the 8400-8600 calls and 8200-8400 puts. In today's session, while the traders preferred to exit 8100 put, heavy buildup was seen in the 8400 put. On the other hand, traders exited from 8400 Call, while 8600 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.61% and reached 16.01. The 50-share CNX Nifty was down by 5.55 points or 0.07% to settle at 8,454.10. Nifty July 2015 futures closed at 8465.90 on Tuesday at a premium of 11.80 points over spot closing of 8,454.10, while Nifty August 2015 futures ended at 8506.40 at a primium of 52.30 points over spot closing. Nifty July futures saw addition of 0.21 million (mn) units, taking the total outstanding open interest (OI) to 19.86 million (mn) units. The near month derivatives contract will expire on July 30, 2015.

From the most active contracts, State Bank of India July 2015 futures traded at premium of 1.30 points at 269.35 compared with spot closing of 268.05. The number of contracts traded were 20,928.

Tata Motors July 2015 futures traded at a premium of 2.50 points at 387.55 compared with spot closing of 385.05. The number of contracts traded were 38,552.

Reliance July 2015 futures traded at a premium of 5.40 points at 1001.75 compared with spot closing of 996.35. The number of contracts traded were 25,213.

HDFC Bank July 2015 futures traded at a premium of 7.20 points at 1095.70 compared with spot closing of 1,088.50. The number of contracts traded were 15,077.

Axis Bank July 2015 futures traded at a premium of 2.45 points at 585.15 compared with spot closing of 582.70. The number of contracts traded were 17,293.

Among Nifty calls, 8500 SP from the July month expiry was the most active call with a contraction of 0.11 million open interests.  Among Nifty puts, 8400 SP from the July month expiry was the most active put with an addition of 0.41 million open interests.  The maximum OI outstanding for Calls was at 8500 SP (4.68 mn) and that for Puts was at 8300 SP (5.48 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8481.53--- Pivot Point 8452.82--- Support --- 8425.38.

The Nifty Put Call Ratio (PCR) finally stood at 1.25 for July month contract.  The top five scrips with highest PCR on OI were Dr. Reddys Laboratories (1.24), HDFC Bank (1.24), Eicher Motors (1.16), L&T (1.09) and BHEL (1).

Among most active underlying, Tata Motors witnessed an addition of 1.44 million of Open Interest in the July month futures contract, followed by Reliance Industries witnessing a contraction of 0.77 million of Open Interest in the July month contract; Hindustan Petroleum Corporation witnessed an addition of 0.01 million of Open Interest in the July month contract, State Bank of India witnessed an addition of 0.21 million of Open Interest in the July month contract and India Cements witnessed an addition of 3.64 million units of Open Interest in the July month's future contract.