Nifty ends marginally higher on Tuesday

Domestic equity index -- Nifty -- ended higher on Tuesday, on account buying by fund and retail investors in the blue chips counters. Investors got some encouragement with the rating agency ICRA projecting Indian economic growth to improve to 7.7 percent in the fiscal year 2016-17, led by domestic consumption demand post the implementation of 7th Pay Commission and One Rank One Pension (OROP) recommendations for the defence services as well as a potential upturn in rural demand presuming a normal monsoon.  On the global front, Asian markets ended mostly in red, as hawkish comments from US Federal Reserve officials clouded the monetary policy outlook less than a week after Fed Chair Janet Yellen had set out a more cautious path to interest rate increases this year. European stocks fell and investors rushed for the safety of gold and government bonds on Tuesday, after two explosions at Brussels airport killed several people and blasts at metro stations in the Belgian capital.

Back home, Indian equity benchmark made flat to negative start and continued traded choppy for the most part of the day, as investors booked profit at higher level.  sentiments were under pressure with slow growth of the manufacturing activity, as the yearly SBI Composite Index for March declined below 50 and is at 49.5, compared with last month index of 51.3. However, sharp buying which was witnessed in the last leg of trade that helped the Nifty to enter into green territory. Finally, Nifty ended with gain of over 10 points.     

The top gainers from the F&O segment were Just Dial, Cummins India and DLF. On the other hand, the top losers were Cadila Healthcare, Dr. Reddy's Laboratories and Godrej Consumer Products. In the index options segment, maximum OI was being seen in the 7200-8000 calls and 6500-7700 puts. In today's session, while the traders preferred to exit 7000 put, heavy buildup was seen in the 7700 put. On the other hand, traders exited from 7500 Call, while 7800 call witnessed considerable OI addition. 

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.60% and reached 16.43. The 50-share Nifty was up by 10.65 points or 0.14% to settle at 7,714.90.   

Nifty March 2016 futures closed 7726.25 on Tuesday at a premium of 11.35 points over spot closing of 7,714.90, while Nifty April 2016 futures ended at 7768.10 at a premium of 53.20 points over spot closing. Nifty March futures saw contraction of 0.41 million (mn) units, taking the total outstanding open interest (OI) to 21.09 million (mn) units. The near month derivatives contract will expire on March 31, 2016.                         

From the most active contracts, ICICI Bank March 2016 futures traded at a premium of 0.40 points at 233.95 compared with spot closing of 233.55. The number of contracts traded were 11,960.        

SBI March 2016 futures traded at a discount of 0.65 points at 197.25 compared with spot closing of 197.90. The number of contracts traded were 19,828.                      

Axis Bank March 2016 futures traded at a premium of 1.65 points at 442.45 compared with spot closing of 440.80. The number of contracts traded were 17,365.                  

Bharat Heavy Electricals March 2016 futures traded at a premium of 0.20 points at 116.80 compared with spot closing of 116.60. The number of contracts traded were 12,841.                                                

Tata Steel March 2016 futures traded at a discount of 1.70 points at 310.10 compared with spot closing of 311.80. The number of contracts traded were 13,290. 

Among Nifty calls, 7700 SP from the March month expiry was the most active call with a contraction of 0.22 million open interests. Among Nifty puts, 7600 SP from the March month expiry was the most active put with an addition of 0.13 million open interests. The maximum OI outstanding for Calls was at 7800 SP (6.45 mn) and that for Puts was at 7600 SP (5.51 mn). The respective Support and Resistance levels of Nifty are: Resistance 7747.47 --- Pivot Point 7695.63 --- Support --- 7663.07.            

The Nifty Put Call Ratio (PCR) finally stood at 1.28 for March month contract. The top five scrips with highest PCR on OI were Indian Overseas Bank (2.92), Mcleod Russel India (2.07), Ultratech Cement (1.85), Divis Laboratories (1.75) and United Breweries (1.70).  

Among most active underlying, Reliance Industries witnessed a contraction of 3.41 million of Open Interest in the March month futures contract, followed by Reliance Infrastructure witnessing a contraction of 0.02 million of Open Interest in the March month contract; State Bank of India witnessed an addition of 0.10 million of Open Interest in the March month contract, Tata Steel  witnessed a contraction of 0.19 million of Open Interest in the March month contract and Ashok Leyland witnessed a contraction of 3.75 million units of Open Interest in the March month's future contract.