Nifty ends with marginal gain on Thursday

Domestic equity index - Nifty - ended with marginal gain on Thursday on account of profit booking by fund and retail investors. Sentiment was subdued with the Finance Minister Arun Jaitley’s statement that it is extremely difficult to achieve double-digit growth in the current global environment. There was some cautiousness in the market with a private report that India cannot surpass China's GDP despite the ‘potential’ to become a big power and underlining that ‘unrealistic’ praise and forecasts for India are just giving an ‘illusory picture’. On the global front, Asian markets ended mostly in green, after the U.S. central bank said it wouldn’t raise interest rates as quickly as expected. European stocks fell after disappointing euro zone inflation data and as nerves showed ahead of the latest Bank of England rate decision at midday.

Back home, after getting gap up opening, equity market continued to trade with traction for the most part of the day’s trade as the US Federal Reserve indicated less-than-expected rate hikes this year. The Fed's dovish stance also raised hopes of a rate cut by the Reserve Bank of India (RBI) and also provided comfort on foreign fund inflows. However, selling witnessed in last minutes of trade that dragged the Nifty in to red. Meanwhile, selling in the pharmaceutical sector too dented the market sentiment on report that pharma sector in India could witness an immediate loss of Rs 1,000 crore due to the government ban on combination drugs that include cough syrups, anti-diabetic medicines and flu treatments. Finally, market ended slightly above the neutral line. 

The top gainers from the F&O segment were Bharat Petroleum Corporation, Ambuja Cements and Tech Mahindra. On the other hand, the top losers were Lupin, Unitech and Eicher Motors. In the index options segment, maximum OI was being seen in the 7200-8000 calls and 6500-7600 puts. In today's session, while the traders preferred to exit 7200 put, heavy buildup was seen in the 7600 put. On the other hand, traders exited from 7400 Call, while 7600 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 16.84. The 50-share Nifty was up by 13.80 points or 0.18% to settle at 7,512.55.   

Nifty March 2016 futures closed 7512.75 on Thursday at a premium of 0.2 points over spot closing of 7,512.55, while Nifty April 2016 futures ended at 7553.15 at a premium of 40.60 points over spot closing. Nifty March futures saw contraction of 0.22 million (mn) units, taking the total outstanding open interest (OI) to 21.48 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 0.80 points at 186.00 compared with spot closing of 185.20. The number of contracts traded were 25,790.                      

ICICI Bank March 2016 futures traded at a premium of 1.70 points at 227.25 compared with spot closing of 225.55. The number of contracts traded were 30,110.             

Axis Bank March 2016 futures traded at a premium of 1.75 points at 428.40 compared with spot closing of 426.65. The number of contracts traded were 24,437.                 

Bharat Heavy Electricals March 2016 futures traded at a premium of 1.60 points at 111.30 compared with spot closing of 109.70. The number of contracts traded were 11,851.  

Tata Steel March 2016 futures traded at a premium of 0.95 points at 296.70 compared with spot closing of 295.75. The number of contracts traded were 13,578. 

Among Nifty calls, 7600 SP from the March month expiry was the most active call with an addition of 0.51 million open interests. Among Nifty puts, 7500 SP from the March month expiry was the most active put with an addition of 0.43 million open interests. The maximum OI outstanding for Calls was at 7500 SP (7.13 mn) and that for Puts was at 7400 SP (6.60 mn). The respective Support and Resistance levels of Nifty are: Resistance 7572.10 --- Pivot Point 7525.75 --- Support --- 7466.20.            

The Nifty Put Call Ratio (PCR) finally stood at 1.15 for March month contract. The top five scrips with highest PCR on OI were Indian Overseas Bank (2.67), Mcleod Russel India (2.07), Divis Laboratories (1.89) Aditya Birla Nuvo (1.69) and Gail India (1.46).  

Among most active underlying, State Bank of India witnessed a contraction of 0.29 million of Open Interest in the March month futures contract, followed by ICICI Bank witnessing an addition of 3.40 million of Open Interest in the March month contract; Axis Bank witnessed a contraction of 0.07 million of Open Interest in the March month contract, Tata Steel witnessed a contraction of 0.45 million of Open Interest in the March month contract and Reliance Industries witnessed a contraction of 0.60 million units of Open Interest in the March month's future contract.