Nifty ends flat ahead of IIP data

Indian benchmark Nifty ended nearly flat on Friday, as investors turned cautious ahead of the July IIP data to be released later today and consumer price inflation data for August on Monday. The IIP data will have a major bearing on the decision of the RBI on the next phase of rate cuts during its upcoming monetary policy meet on September 29, 2015. Besides, fears over rising deficiency in the June-September monsoon rainfall, which irrigates nearly half of the country's farmlands, also hit sentiment.  On the global front, Asian markets ended mostly in red, as uncertainty over whether the US Federal Reserve will raise interest rates next week gripped investors. European markets have also made a weak start and CAC, DAX and FTSE were trading with a cut of over half a percent in early deals.

Back home, the benchmark got off to a positive opening, tracking mixed Asian markets and overnight gains on Wall Street.  Sentiments got some support came after vice-chairman of NITI Aayog, Arvind Panagariya, made a strong pitch for 50-100 bps cut in the RBI’s key rates. Panagariya isn’t the only one from the government to build pressure on Rajan to cut rate. Finance Minister Arun Jaitley and Chief Economic Advisor (CEA) Arvind Subramanian, another reputed economist at the government, too have been making public comments citing the need for steeper rate cuts. However, the index failed to capitalize on the early momentum and slipped to lower levels as investors turned cautious ahead of the July factory output numbers scheduled for release later in the day. The frontline index kept losing momentum through the session and finally dipped into the negative terrain in the last leg of trade. Despite the early optimism, investors remained wary about the sustainability as high amount of intra-day volatility continues to keep investors at bay. Also, traders would be taking a cautious stance ahead of Chinese industrial output, retail sales and investment data to be announced on Sunday, which will give a sense of whether the world's second-largest nation is continuing to lose momentum. Though the market has largely been reacting to global cues, domestic developments like the delay of the GST bill, a rise in monsoon rain deficiency and weaker growth in auto sales in August, among others, were also weighing on investor sentiments. Sector-wise, healthy buying was witnessed in Realty, fast moving consumer goods (FMCG), information technology (IT) and Media sectors. However, metals, Auto and Energy stocks came under selling pressure.

The top gainers from the F&O segment were Amtek Auto, Wockhardt and SRF. On the other hand, the top losers were Cairn India, Godrej Industries and Apollo Hospitals Enterprise. In the index options segment, maximum OI was being seen in the 8200-8500 calls and 7200-7500 puts. In today's session, while the traders preferred to exit 7400 put, heavy buildup was seen in the 7500 put. On the other hand, traders exited from 7600 Call, while 8000 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.92% and reached 24.97. The 50-share CNX Nifty was up by 1.20 points or 0.02% to settle at 7789.30.  Nifty September 2015 futures closed at 7789.35 on Friday at a premium of 0.05 points over spot closing of 7,789.30, while Nifty October 2015 futures ended at 7823.30 at a premium of 34 points over spot closing. Nifty September futures saw contraction of 0.05 million (mn) units, taking the total outstanding open interest (OI) to 22.67 million (mn) units. The near month derivatives contract will expire on September 24, 2015. 

From the most active contracts, SBI September 2015 futures traded at premium of 45 points at 230.95 compared with spot closing of 230.50. The number of contracts traded were 28,433.

ICICI Bank September 2015 futures traded at a premium of 0.80 points at 267.60 compared with spot closing of 266.80. The number of contracts traded were 21,328.

Tata Motors September 2015 futures traded at a premium of 0.45 points at 344.05 compared with spot closing of 343.60. The number of contracts traded were 27,708.

Reliance September 2015 futures traded at a premium of 1.25 points at 861.60 compared with spot closing of 860.35. The number of contracts traded were 17,716.

Axis Bank September 2015 futures traded at a premium of 1.65 points at 482.45 compared with spot closing of 480.80. The number of contracts traded were 21,785.

Among Nifty calls, 8000 SP from the September month expiry was the most active call with an addition of 0.65 million open interests.  Among Nifty puts, 7700 SP from the September month expiry was the most active put with a contraction of 0.18 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.67 mn) and that for Puts was at 7500 SP (4.61 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7849.47 --- Pivot Point 7804.68 --- Support --- 7744.52.

The Nifty Put Call Ratio (PCR) finally stood at 1.05 for September month contract.  The top five scrips with highest PCR on OI were Indraprastha Gas (1.69), Bajaj Finance (1.17), Ultratech Cement (1.09), CEAT (1.08) and Wipro (1.06).   

Among most active underlying, State Bank of India witnessed a contraction of 1.56 million of Open Interest in the September month futures contract, followed by Infosys witnessing a contraction of 0.68 million of Open Interest in the September month contract; CEAT witnessed an addition of 0.05 million of Open Interest in the September month contract, ICICI Bank witnessed a contraction of 0.89 million of Open Interest in the September month contract and Tata Motors witnessed a contraction of 0.29 million units of Open Interest in the September month's future contract.