Nifty ends below 7,650 level

Domestic equity index -- Nifty -- ended lower over two percent on Tuesday on account of sustained selling by fund and retail investors. Sentiments were under pressure with the Moody's Investors Service’s report saying that the inflation could rise in India if unfavorable weather pushes food prices again this season, if the rupee were to depreciate sharply or, and most relevant, if the gradual implementation of the Pay Commission's salary increases leads to widespread wage and price increases. Further, sentiments remained dampened despite the Reserve Bank cutting repo rate by 25 basis points, which was in line with market expectations. Besides, selling in rate sensitive sectors such as banking, Auto and Realty too dampened sentiment.  On the global front, Asian markets ended mostly in red, with Japanese shares plunging on the back of a stronger yen. European markets were trading in red on the back of an unexpected drop in German manufacturing orders amid global growth concerns.

Bach home, after getting a weak opening, Indian equity benchmark extended its losses throughout the session and ended with cut of over 155 points. The top gainers from the F&O segment were L&T Finance Holdings, Biocon and Ajanta Pharma. On the other hand, the top losers were Adani Enterprises, Indiabulls Real Estate and Dewan Housing Finance Corporation. In the index options segment, maximum OI was being seen in the 7500-8200 calls and 7000-7700 puts. In today's session, while the traders preferred to exit 7200 put, heavy buildup was seen in the 7300 put. On the other hand, traders exited from 7000 Call, while 8100 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.18% and reached 17.83. The 50-share Nifty was down by 155.60 points or 2.01% to settle at 7,603.20.   

Nifty April 2016 futures closed 7623.50 on Tuesday at a premium of 20.30 points over spot closing of 7,603.20, while Nifty May 2016 futures ended at 7657.70 at a premium of 54.50 points over spot closing.  Nifty April futures saw contraction of 0.92 million (mn) units, taking the total outstanding open interest (OI) to 17.84 million (mn) units. The near month derivatives contract will expire on April 28, 2016.                         

From the most active contracts, SBI April 2016 futures traded at a premium of 0.15 points at 183.90 compared with spot closing of 183.75. The number of contracts traded were 41,827.        

ICICI Bank April 2016 futures traded at a discount of 0.70 points at 225.20 compared with spot closing of 225.90. The number of contracts traded were 26,229.                         

Bank of Baroda April 2016 futures traded at a premium of 0.70 points at 144.35 compared with spot closing of 143.65. The number of contracts traded were 13,725.                                                      

Axis Bank April 2016 futures traded at a premium of 1.80 points at 433.10 compared with spot closing of 431.30. The number of contracts traded were 23,806.  

DLF April 2016 futures traded at a premium of 0.60 points at 113.60 compared with spot closing of 113.00. The number of contracts traded were 11,949. 

Among Nifty calls, 7800 SP from the March month expiry was the most active call with an addition of 1.06 million open interests. Among Nifty puts, 7600 SP from the March month expiry was the most active put with an addition of 5.43 million open interests. The maximum OI outstanding for Calls was at 8000 SP (7.27 mn) and that for Puts was at 7500 SP (5.01 mn). The respective Support and Resistance levels of Nifty are: Resistance 7696.78 --- Pivot Point 7642.72 --- Support --- 7549.13.            

The Nifty Put Call Ratio (PCR) finally stood at 0.84 for March month contract. The top five scrips with highest PCR on OI were Indian Overseas Bank (3.56), CESC (2.23), Castrol India (1.72), United Breweries (1.66) and Syndicate Bank (1.34).  

Among most active underlying, State Bank of India witnessed an addition of 4.47 million of Open Interest in the March month futures contract, followed by ICICI Bank witnessing an addition of 1.24 million of Open Interest in the March month contract; Yes Bank witnessed an addition of 0.42 million of Open Interest in the March month contract, Axis Bank witnessed an addition of 0.33 million of Open Interest in the March month contract and Tata Steel witnessed an addition of 0.18 million units of Open Interest in the March month's future contract.