Nifty ends lower amid weak global cues

Domestic equity index -- Nifty -- ended lower on Tuesday, on account of sustained selling by fund and retail investors amid weak global cues. Selling pressure in the pharmaceutical companies after the government notified a ban on about 300 fixed dose combination (FDC) drugs also dragged market down. Further, marketmen maintained a cautious approach ahead of the two day meetings of the Us Federal Reserve’s Federal open Market committee that begins on Tuesday. On the global front, Asian markets ended mostly in red, after the Bank of Japan painted a gloomier view of the world's third-largest economy, but the yen firmed as policymakers appeared to back away from any imminent move to cut interest rates further into negative territory. European markets were trading in under pressure with France’s CAC was down by 0.94%, UK’s FTSE 100 was down by 0.69% and Germany’s DAX was down by 0.48%.

Back home, after getting flat to negative opening, Indian equity market has extended its losses throughout the session and ended near intraday’s low level with cut of over one percent. Investor’s sentiment remained weak since morning with one of the leading global brokerage firm revising its growth forecast for India for 2016 to 7.5 per cent from 7.9 per cent previously and noted that the country’s economy is expected to see tepid recovery largely owing to external factors. Further, investors failed get any relief from the report that the retail inflation falling to a three-month low of 5.18 per cent in February after rising for five months in a row as food prices including vegetables, pulses and fruits became less costly.

The top gainers from the F&O segment were IFCI, CESC and NCC. On the other hand, the top losers were Crompton Greaves, Lupin and Divi's Laboratories. In the index options segment, maximum OI was being seen in the 7200-8000 calls and 6500-7500 puts. In today's session, while the traders preferred to exit 7200 put, heavy buildup was seen in the 7100 put. On the other hand, traders exited from 7900 Call, while 7700 call witnessed considerable OI addition.  

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.89% and reached 17.59. The 50-share Nifty was up by 78.15 points or 1.04% to settle at 7,460.60.   

Nifty March 2016 futures closed 7485.40 on Tuesday at a premium of 24.80 points over spot closing of 7,460.60, while Nifty April 2016 futures ended at 7523.95 at a premium of 63.35 points over spot closing. Nifty March futures saw contraction of 0.16 million (mn) units, taking the total outstanding open interest (OI) to 21.59 million (mn) units. The near month derivatives contract will expire on March 31, 2016.                         

From the most active contracts, SBI March 2016 futures traded at a premium of 0.75 points at 185.80 compared with spot closing of 185.05. The number of contracts traded were 21,836.                      

ICICI Bank March 2016 futures traded at a premium of 1.05 points at 222.10 compared with spot closing of 221.05. The number of contracts traded were 11,703.             

Axis Bank March 2016 futures traded at a premium of 2.35 points at 421.15 compared with spot closing of 418.80. The number of contracts traded were 14,373.                 

Tata Steel March 2016 futures traded at a discount of 0.15 points at 299.85 compared with spot closing of 300.00. The number of contracts traded were 12,883.  

Reliance Industries March 2016 futures traded at a discount of 3.85 points at 1015.70 compared with spot closing of 1,019.55. The number of contracts traded were 10,149.    

Among Nifty calls, 7600 SP from the March month expiry was the most active call with an addition of 0.14 million open interests. Among Nifty puts, 7400 SP from the March month expiry was the most active put with an addition of 0.51 million open interests. The maximum OI outstanding for Calls was at 7500 SP (7.09 mn) and that for Puts was at 7000 SP (6.08 mn). The respective Support and Resistance levels of Nifty are: Resistance 7519.60 --- Pivot Point 7486.20 --- Support --- 7427.20.            

The Nifty Put Call Ratio (PCR) finally stood at 1.10 for March month contract. The top five scrips with highest PCR on OI were Mcleod Russel India (4.40), Indian Overseas Bank (3.00), Cummins India (1.67), Divis Laboratories (1.65) and UCO Bank (1.50).   

Among most active underlying, Lupin witnessed an addition of 0.21 million of Open Interest in the March month futures contract, followed by State Bank of India witnessing a contraction of 2.07 million of Open Interest in the March month contract; Tata Steel witnessed a contraction of 0.14 million of Open Interest in the March month contract, Yes Bank witnessed an addition of 1.93 million of Open Interest in the March month contract and Reliance Industries witnessed a contraction of 0.19 million units of Open Interest in the March month's future contract.