Nifty ends lower amid weak global cues

Domestic equity index -- Nifty --  ended lower over one and half percent on heavy selling by market participants in the blue chip counters amid weak cues from the global markets after Bank of Japan (BoJ) trimmed GDP growth forecast to 1.2% from 1.5% earlier for 2016-17. Meanwhile, the BoJ kept its monetary policy steady keeping the negative interest rate unchanged. Sentiment also remained downbeat with Fitch ratings’ report which stated that rapid rise in private-sector debt in emerging markets (EMs), particularly in foreign currency, has increased risks at a time of heightened global uncertainty. On the global front, Asian markets ended mostly in red after the Bank of Japan’s inaction followed an interest-rate status quo on Wednesday from the Federal Reserve, whose relatively upbeat post-decision commentary failed to quash expectations of a rate rise later this year, possibly as early as June. European markets were trading in lower, after the Bank of Japan unexpectedly held off from expanding monetary stimulus, while Spanish bank BBVA and Airbus fell on disappointing earnings updates.

Back home, after making a weak opening, benchmark turned flat for short period of time, thereafter market once again entered into red and extended its loss throughout the session to end near intraday low level with cut of over 130 points. The top gainers from the F&O segment were Indiabulls Real Estate, KPIT Technologies and Housing Development and Infrastructure. On the other hand, the top losers were Jubilant Foodworks, Tata Elxsi and IDFC. In the index options segment, maximum OI was being seen in the 7800-8200 calls and 7000-7800 puts. In today's session, while the traders preferred to exit 7900 put, heavy buildup was seen in the 7800 put. On the other hand, traders exited from 7000 Call, while 8000 call witnessed considerable OI addition.  

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 1.50% and reached 16.59. The 50-share Nifty was down by 132.65 points or 1.66% to settle at 7,847.25.   

Nifty May 2016 futures closed 7895.30 on Thursday at a premium of 48.05 points over spot closing of 7,847.25, while Nifty June 2016 futures ended at 7910.35 at a premium of 63.10 points over spot closing.  Nifty May futures saw addition of 4.28 million (mn) units, taking the total outstanding open interest (OI) to 20.13 million (mn) units. The near month derivatives contract will expire on May 26, 2016.                         

From the most active contracts, SBI May 2016 futures traded at a premium of 0.15 points at 192.25 compared with spot closing of 192.10. The number of contracts traded were 22,988.         

ICICI Bank May 2016 futures traded at a premium of 0.95 points at 240.95 compared with spot closing of 240.00. The number of contracts traded were 19,409.          

Axis Bank May 2016 futures traded at a premium of 4.05 points at 470.20 compared with spot closing of 466.15. The number of contracts traded were 23,403.                                                       

Reliance Industries May 2016 futures traded at a premium of 10.55 points at 1004.05 compared with spot closing of 993.50. The number of contracts traded were 25,858.   

Yes Bank May 2016 futures traded at a discount of 7.55 points at 941.45 compared with spot closing of 949.00. The number of contracts traded were 21,842.  

Among Nifty calls, 8000 SP from the May month expiry was the most active call with an addition of 4.49 million open interests. Among Nifty puts, 7900 SP from the May month expiry was the most active put with a contraction of 3.96 million open interests. The maximum OI outstanding for Calls was at 8000 SP (10.53 mn) and that for Puts was at 7800 SP (6.69 mn). The respective Support and Resistance levels of Nifty are: Resistance 7948.02 --- Pivot Point 7891.23 --- Support --- 7790.47.            

The Nifty Put Call Ratio (PCR) finally stood at 0.96 for May month contract. The top five scrips with highest PCR on OI were Indian Overseas Bank (3.40), United Breweries (2.14), Apollo Tyres (1.75), Bosch (1.67) and IRB Infrastructure Developers (1.51).  

Among most active underlying, Yes Bank witnessed a contraction of 1.41 million of Open Interest in the May month futures contract, followed by Maruti Suzuki India witnessing a contraction of 3.66 million of Open Interest in the May month contract; Reliance Industries witnessed an addition of 6.18 million of Open Interest in the May month contract, Tata Steel witnessed a contraction of 5.55 million of Open Interest in the May month contract and State Bank of India witnessed a contraction of 14.31 million units of Open Interest in the May month's future contract.