Nifty ends below 7,600 level

Domestic equity index -- Nifty -- ended lower on Tuesday, on account of sustained selling in pharmaceuticals stocks. Investors remained cautious ahead of the March series futures and options contracts expiry due on Thursday. Also, traders are anxiously awaiting the announcement of first bi-monthly monetary policy of the Reserve Bank of India (RBI) for FY16-17 amid hopes for a 25 bps rate cut. However, investors got some support with Finance Minister Arun Jaitley’s statement that government will provide sufficient funds to recapitalise public sector banks (PSBs) to ensure that they play a significant role in boosting growth. Some support also come in with the Prime Minister Narendra Modi’s statement that the growth in the Indian economy was led by some of the reforms undertaken by his government since taking over in May 2014. He said India’s economic success is the result of prudence, sound policy and effective management. On the global front, Asia stock markets ended mixed Tuesday as investors weighed when the U.S. central bank might next raise interest rates. European equities climbed higher in early trading on Tuesday, with the market catching up after a long weekend while mining stocks tracked stronger metals prices.

Back home, after getting flat to negative start, Nifty were alternating between positive and negative territory throughout session and ended with loss of over 18 points.  The top gainers from the F&O segment were Dish TV India, Pidilite Industries and Bharti Infratel. On the other hand, the top losers were Jindal Steel & Power, Lupin and Glenmark Pharmaceuticals. In the index options segment, maximum OI was being seen in the 7500-8000 calls and 6500-7700 puts. In today's session, while the traders preferred to exit 7700 put, heavy buildup was seen in the 7500 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 increased by 0.87% and reached 17.63. The 50-share Nifty was down by 18.10 points or 0.24% to settle at 7,597.00.   

Nifty March 2016 futures closed 7620.05 on Tuesday at a premium of 23.05 points over spot closing of 7,597.00, while Nifty April 2016 futures ended at 7666.40 at a premium of 69.40 points over spot closing. Nifty March futures saw contraction of 2.69 million (mn) units, taking the total outstanding open interest (OI) to 16.05 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 0.25 points at 224.25 compared with spot closing of 224.00. The number of contracts traded were 20,730.    

SBI March 2016 futures traded at a premium of 1.30 points at 190.00 compared with spot closing of 189.30. The number of contracts traded were 28,736.                            

Axis Bank March 2016 futures traded at a premium of 1.55 points at 430.55 compared with spot closing of 429.00. The number of contracts traded were 24,708.                                                      

HDFC Bank March 2016 futures traded at a premium of 3.60 points at 1056.60 compared with spot closing of 1,053.00. The number of contracts traded were 27,135. 

Reliance Industries March 2016 futures traded at a premium of 3.30 points at 1037.30 compared with spot closing of 1,034.00. The number of contracts traded were 19,975.  

Among Nifty calls, 7700 SP from the March month expiry was the most active call with an addition of 0.42 million open interests. Among Nifty puts, 7600 SP from the March month expiry was the most active put with an contraction of 0.24 million open interests. The maximum OI outstanding for Calls was at 7700 SP (6.94 mn) and that for Puts was at 7600 SP (5.15 mn). The respective Support and Resistance levels of Nifty are: Resistance 7639.18 --- Pivot Point 7610.72 --- Support --- 7568.53.            

The Nifty Put Call Ratio (PCR) finally stood at 1.20 for March month contract. The top five scrips with highest PCR on OI were Indian Overseas Bank (2.71), United Breweries (2.45), Bata India (2.34), Ultratech Cement (1.69) and Cairn India (1.65).  

Among most active underlying, Lupin witnessed a contraction of 1.08 million of Open Interest in the March month futures contract, followed by State Bank of India  witnessing a contraction of 15.51 million of Open Interest in the March month contract; HDFC Bank witnessed a contraction of 8.69 million of Open Interest in the March month contract, Reliance Industries witnessed a contraction of 3.98 million of Open Interest in the March month contract and Ashok Leyland witnessed a contraction of 13.82 million units of Open Interest in the March month's future contract.