Nifty ends higher amid firm global cues

The benchmark index -- Nifty has ended higher amid firm global cues. Sentiment got boost with the report that the Centre's indirect tax mop-up rose 41 per cent in April led by high excise collections, signaling a pick-up in economic activity. A part of the collections was on account of additional revenue measures announced in the current year. Further, support also came in   after the rating agency -- India Ratings and Research said that the Index of Industrial Production (IIP) in March is likely to grow at 1.9% while deflationary pressure in the wholesale price index will moderate in April data. Moreover, the Consumer Price Index (CPI) based retail inflation is projected to come around at 4.9%. The rating also said that it expects industrial production in March to get a boost from better performance in the core sectors of the economy. The eight core industries that comprise around 38% of IIP grew 6.4% YoY in March as against 5.7% in the previous month. The rating agency believes electricity and steel production will drive industrial production in March 2016. 

On the global front, Asian markets, recovering from their initial losses, ended higher on Tuesday, led by a surge in Japanese stocks after officials warned that the government could intervene against a sharp rise in the yen. European markets were trading higher, with Danish jewellery maker Pandora surging after strong results and bank Credit Suisse gaining after a smaller than expected first quarter loss.

Back home, after making a flat to positive opening, domestic equity market entered into negative terrain and continued  to trade in red for the first of trade on account of profit booking.  Further, market participants remained cautious ahead of important macro data slated to be announced later in the week. Trader’s sentiment was remained down beat with the report that higher food and fuel prices probably nudged India’s annual inflation up to 50% in April from 4.83% in March, making it harder for the Reserve Bank of India (RBI) to follow up last month’s interest rate cut swiftly. However, in the second half of trade market entered into positive territory and continued to trade in green till end. The top gainers from the F&O segment were Kaveri Seed Company, Engineers India and Cadila Healthcare. On the other hand, the top losers were Just Dial, Jaiprakash Associates and Bata India. 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 7500 put, heavy buildup was seen in the 7600 put. On the other hand, traders exited from 7900 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 1.19% and reached 16.41. The 50-share Nifty was up by 21.75 points or 0.28% to settle at 7,887.80.   

Nifty May 2016 futures closed at 7919.75 on Tuesday at a premium of 31.95 points over spot closing of 7,887.80, while Nifty June 2016 futures ended at 7930.45 at a premium of 42.65 points over spot closing.  Nifty May futures saw addition of 0.26 million (mn) units, taking the total outstanding open interest (OI) to 18.48 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 0.20 points at 189.65 compared with spot closing of 189.45. The number of contracts traded were 13,866.                

ICICI Bank May 2016 futures traded at a premium of 0.75 points at 226.30 compared with spot closing of 225.55. The number of contracts traded were 13,669.          

Tata Motors May 2016 futures traded at a premium of 0.70 points at 390.90 compared with spot closing of 390.20. The number of contracts traded were 12,585. 

Axis Bank May 2016 futures traded at a premium of 1.75 points at 488.85 compared with spot closing of 487.10. The number of contracts traded were 17,452.                

Tata Steel May 2016 futures traded at a premium of 1.05 points at 329.05 compared with spot closing of 328.00. The number of contracts traded were 18,073. 

Among Nifty calls, 8000 SP from the May month expiry was the most active call with a contraction of 0.06 million open interests. Among Nifty puts, 7800 SP from the May month expiry was the most active put with an addition of 0.33 million open interests. The maximum OI outstanding for Calls was at 8000 SP (6.48 mn) and that for Puts was at 7700 SP (5.35 mn). The respective Support and Resistance levels of Nifty are: Resistance 7910.57 --- Pivot Point 7874.13 --- Support --- 7851.37.             

The Nifty Put Call Ratio (PCR) finally stood at 0.90 for May month contract. The top five scrips with highest PCR on OI were Indian Overseas Bank (2.09), Indusind Bank (1.23), HDFC (1.22), Indiabulls Real Estate (1.06) Axis Bank (1.00).  

Among most active underlying, Tata Steel witnessed a contraction of 0.57 million of Open Interest in the May month futures contract, followed Axis Bank witnessing an addition of 1.30 million of Open Interest in the May month contract; Tata Motors witnessed an addition of 0.20 million of Open Interest in the May month contract, ICICI Bank witnessed an addition of 0.64 million of Open Interest in the May month contract and Maruti Suzuki India witnessed an addition of 0.15 million units of Open Interest in the May month's future contract.