Nifty ends lower for 3rd consecutive day amid weak global cues

The benchmark index -- Nifty has ended lower on Wednesday on account of selling by market participants in the blue chips stocks such as Adani ports and Tata Motors amid weak cues from the global cues. Investor’s sentiment remained subdued with a report that India's services firms fell to a four-month low of 53.7 in April from 54.3 in March on the back of new business growing slower than the previous months. Further, persistent selling by foreign institutional investors, fall in global commodity prices and weakness in the rupee against dollar too weighed down sentiments. Meanwhile, International Monetary Fund (IMF) has said that financial inequality is highest in India and China among Asia Pacific countries despite the two being among the fastest growing economies.

In the global markets, Asian markets ended mostly in red amid renewed global growth concerns in the wake of weaker-than-expected Chinese manufacturing data.  The Caixin China general manufacturing purchasing managers' index fell to 49.4 in April 2016 from 49.7 in March 2016.  European stocks hovered near a three-week low on Wednesday, with shares in Dialog Semiconductor and BHP Billiton among the worst performers.

Back home, after making negative start, Indian equity benchmark continued to trade choppy throughout the session and finally ended with cut of over 40 points. The top gainers from the F&O segment were The Federal Bank, Petronet LNG and Housing Development Finance Corporation. On the other hand, the top losers were Adani Ports and Special Economic Zone, Indo Count Industries and Steel Authority of India. In the index options segment, maximum OI was being seen in the 7800-8300 calls and 7000-7800 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 8200 Call, while 8100 call witnessed considerable OI addition. 

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.10% and reached 17.44. The 50-share Nifty was down by 40.45 points or 0.52% to settle at 7,706.55.   

Nifty May 2016 futures closed at 7732.75 on Wednesday at a premium of 26.20 points over spot closing of 7,706.55, while Nifty June 2016 futures ended at 7747.35 at a premium of 40.80 points over spot closing. Nifty May futures saw contraction of 0.60 million (mn) units, taking the total outstanding open interest (OI) to 19.19 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 0.75 points at 180.45 compared with spot closing of 179.70. The number of contracts traded were 17,626.                

ICICI Bank May 2016 futures traded at a premium of 1.60 points at 215.85 compared with spot closing of 214.25. The number of contracts traded were 25,178.          

Vedanta May 2016 futures traded at a premium of 0.70 points at 104.75 compared with spot closing of 104.05. The number of contracts traded were 11,637. 

Adani Ports and Special Economic Zone May 2016 futures traded at a premium of 1.45 points at 208.70 compared with spot closing of 207.25. The number of contracts traded were 17,933.                

Axis Bank May 2016 futures traded at a discount of 0.45 points at 464.50 compared with spot closing of 464.95. The number of contracts traded were 16,629.    

Among Nifty calls, 7800 SP from the May month expiry was the most active call with an addition of 0.86 million open interests. Among Nifty puts, 7700 SP from the May month expiry was the most active put with a contraction of 0.41 million open interests. The maximum OI outstanding for Calls was at 8000 SP (5.55 mn) and that for Puts was at 7700 SP (4.05 mn). The respective Support and Resistance levels of Nifty are: Resistance 7737.95 --- Pivot Point 7717.60 --- Support --- 7686.20.             

The Nifty Put Call Ratio (PCR) finally stood at 0.79 for May month contract. The top five scrips with highest PCR on OI were Indian Overseas Bank (1.94), KPIT Technologies (1.76), Container Corporation of India (1.785), United Breweries (1.36) and Indusind Bank (1.05).  

Among most active underlying, ICICI Bank witnessed an addition of 4.70 million of Open Interest in the May month futures contract, followed Tata Steel witnessing a contraction of 0.16 million of Open Interest in the May month contract; Tata Motors witnessed an addition of 0.50 million of Open Interest in the May month contract, State Bank of India witnessed a contraction of 0.22 million of Open Interest in the May month contract and Yes Bank witnessed an addition of 0.14 million units of Open Interest in the May month's future contract.