Nifty ends lower on disappointing macro data

Domestic equity index -- Nifty has ended lower with cut of over a percent on account of weak macroeconomic data. Retail inflation, as measured by the consumer price index (CPI) for April accelerated to 5.39% as compared to 4.83% in March, while India's industrial output rose by 0.1 per cent in March, largely losing the momentum generated in February when it had risen by two per cent, after a three-month fall. Further, weakness in rupee also weighed down sentiments. The rupee depreciated by 15 paise to 66.77 against the US dollar at the time of market closing on account of increased demand for the American currency from importers. Besides, selling in IT stocks too pressurized sentiments. TCS, Wipro and Infosys ended lower due to profit booking. Meanwhile, Rate sensitive sectors like Banks, Auto and Realty edged lower after rise in consumer price inflation (CPI) dashed hopes of a rate cut by the Reserve Bank of India.

On the global front, Asian markets ended lower with Japanese stocks coming under pressure from fresh strength in the yen against the dollar. European markets were trading lower following declines in U.S. and Asian markets overnight and a slide in the oil price.

Back home, after making a negative opening, Indian equity benchmark has extended its loss and continued to trade under pressure throughout the session. Finally, Nifty ended with loss of over 85 points.  The top gainers from the F&O segment were Power Finance Corporation, Havells India and IDFC. On the other hand, the top losers were SRF, UCO Bank and Reliance Communications. In the index options segment, maximum OI was being seen in the 7800-8500 calls and 7000-7800 puts. In today's session, while the traders preferred to exit 7900 put, heavy buildup was seen in the 7100 put. On the other hand, traders exited from 8600 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 3.10% and reached 16.99. The 50-share Nifty was down by 85.50 points or 1.08% to settle at 7,814.90.   

Nifty May 2016 futures closed at 7830.55 on Friday at a premium of 15.65 points over spot closing of 7,814.90, while Nifty June 2016 futures ended at 7842.90 at a premium of 28.00 points over spot closing.  Nifty May futures saw contraction of 0.75 million (mn) units, taking the total outstanding open interest (OI) to 16.28 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 discount of 0.15 points at 184.75 compared with spot closing of 184.90. The number of contracts traded were 17,236.                

ICICI Bank May 2016 futures traded at a discount of 0.15 points at 226.70 compared with spot closing of 226.85. The number of contracts traded were 20,724.          

Adani Ports and Special Economic Zone May 2016 futures traded at a discount of 0.25 points at 188.55 compared with spot closing of 188.80. The number of contracts traded were 12,986. 

Tata Steel May 2016 futures traded at a premium of 2.30 points at 323.90 compared with spot closing of 321.60. The number of contracts traded were 11,425.                

Axis Bank May 2016 futures traded at a premium of 0.45 points at 491.60 compared with spot closing of 491.15. The number of contracts traded were 12,087.  

Among Nifty calls, 7900 SP from the May month expiry was the most active call with an addition of 0.54 million open interests. Among Nifty puts, 7800 SP from the May month expiry was the most active put with a contraction of 0.39 million open interests. The maximum OI outstanding for Calls was at 8000 SP (8.55 mn) and that for Puts was at 7800 SP (5.18 mn). The respective Support and Resistance levels of Nifty are: Resistance 7869.20 --- Pivot Point 7826.70 --- Support --- 7772.40.             

The Nifty Put Call Ratio (PCR) finally stood at 0.82 for May month contract. The top five scrips with highest PCR on OI were Indusind Bank (1.35), Indian Overseas Bank (1.33), Zee Entertainment (1.17), UCO Bank (1.15) and Axis Bank (1.10).  

Among most active underlying, ICICI Bank witnessed a contraction of 4.40 million of Open Interest in the May month futures contract, followed Tata Steel witnessing an addition of 1.86 million of Open Interest in the May month contract; Reliance Industries witnessed an addition of 0.10 million of Open Interest in the May month contract, Tata Motors witnessed a addition of 0.14 million of Open Interest in the May month contract and Yes Bank witnessed a contraction of 0.22 million units of Open Interest in the May month's future contract.