Nifty skids lower for second consecutive day

The domestic equity Index -- Nifty ended lower as investors booked profit at higher level amid feeble global cues.  Investors’ sentiment came in under pressure after the International Monetary Fund (IMF) stated that China and Japan’s economies are expected to slow sharply over the next two years. In its Regional Economic Outlook for Asia and the Pacific, the IMF also warned of several external challenges, from weakness in advanced economies, weak global trade and increasingly volatile global financial markets. The Fund predicted growth in Asia to come in at 5.3% this year and next, down from its previous forecast of 5.4%. On the global front, Asian markets ended mostly in red, amid dip in oil prices and strengthening of the US dollar. European markets were trading lower, with Commerzbank leading the market lower after a profit slump, while mining stocks weakened as they tracked a decline in metals prices.

Back Home, After making a gap-up opening, benchmark continued to trade vigor for the first part of session as investors’ sentiment was upbeat with the report that the combined output of eight crucial infrastructure sectors jumped to a 16-month high of 6.4 per cent in March due to a double-digit growth in refinery products, fertilisers, cement and electricity. Thereafter, market erased all early gain and entered into negative terrain and continued to trade in under pressure till end. Finally, Nifty ended the session with loss of over 58 points.  The top gainers from the F&O segment were Aurobindo Pharma, United Spirits and Indiabulls Real Estate. On the other hand, the top losers were TVS Motor Company, Marico and Century Textiles & Industries. In the index options segment, maximum OI was being seen in the 7800-8500 calls and 7000-7900 puts. In today's session, while the traders preferred to exit 7800 put, heavy buildup was seen in the 7700 put. On the other hand, traders exited from 7500 Call, while 8200 call witnessed considerable OI addition.   

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.16% and reached 17.46. The 50-share Nifty was down by 58.90 points or 0.75% to settle at 7,747.00.   

Nifty May 2016 futures closed at 7783.80 on Tuesday at a premium of 36.80 points over spot closing of 7,747.00, while Nifty June 2016 futures ended at 7796.70 at a premium of 49.70 points over spot closing.  Nifty May futures saw contraction of 0.01 million (mn) units, taking the total outstanding open interest (OI) to 19.79 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 0.25 points at 184.15 compared with spot closing of 183.90. The number of contracts traded were 17,988.    

Vedanta May 2016 futures traded at a premium of 1.00 points at 110.50 compared with spot closing of 109.50. The number of contracts traded were 11,938.              

ICICI Bank May 2016 futures traded at a premium of 1.30 points at 222.50 compared with spot closing of 221.20. The number of contracts traded were 21,150.          

Axis Bank May 2016 futures traded at a premium of 1.20 points at 471.70 compared with spot closing of 470.50. The number of contracts traded were 13,796.                                                       

Tata Motors May 2016 futures traded at a premium of 2.00 points at 410.85 compared with spot closing of 408.85. The number of contracts traded were 14,454.  

Among Nifty calls, 8000 SP from the May month expiry was the most active call with an addition of 0.65 million open interests. Among Nifty puts, 7800 SP from the May month expiry was the most active put with a contraction of 0.40 million open interests. The maximum OI outstanding for Calls was at 8200 SP (5.44 mn) and that for Puts was at 7700 SP (4.46 mn). The respective Support and Resistance levels of Nifty are: Resistance 25559.46 --- Pivot Point 25376.20 --- Support --- 25046.44.            

The Nifty Put Call Ratio (PCR) finally stood at 0.84 for May month contract. The top five scrips with highest PCR on OI were Indian Overseas Bank (2.00), Container Corporation of India (1.67), United Breweries (1.46), KPIT Technologies (1.35) and Vedanta (1.25).  

Among most active underlying, TVS Motor Company witnessed an addition of 2.49 million of Open Interest in the May month futures contract, followed ICICI Bank witnessing an addition of 1.34 million of Open Interest in the May month contract; Reliance Industries witnessed an addition of 0.33 million of Open Interest in the May month contract, Tata Steel witnessed a contraction of 0.54 million of Open Interest in the May month contract and Tata Motors witnessed an addition of 0.28 million units of Open Interest in the May month's future contract.