Nifty snaps two-day winning streak on Wednesday

Benchmark index -- Nifty has ended lower on Wednesday amid weak cues from global markets after data showed rising U.S. inflation and on comments from Fed officials that rekindled prospects of an interest rate hike as early as June. Further, investors’ sentiment remained subdued with report that India’s receipts from invisible services declined 4 per cent to $57.61 billion in the October-December quarter of 2015-16, while payments towards such activities rose by 5.8 per cent to $30.67 billion. However, downside remained capped with private report that growth recovery in Indian economy is becoming more ‘broad-based’ with rise in public sector capital expenditure and foreign direct investment. Also, going forward the consumption growth is expected to pick up further. Besides, some support also came in with a Nielsen survey that Indian consumers were the most confident in the world in terms of job prospects, personal finances and concerns in the first quarter of 2016 with their confidence index touching a nine-year high during the period.

On the global front, Asian markets ended mostly in red as traders moved their chips amid concerns the U.S. Federal Reserve may hike interest rates soon, with Japan's shares ending a tad down after topsy-turvy trade.  European markets were trading lower, as mining shares felt the pinch from a strengthening dollar. Britain's FTSE100 was down 0.36%, France's CAC40 index slips 0.13% and Germany's DAX falls 0.03%.

Back home, after making a gap-down opening, Indian equity benchmark has extended its loss and continued to trade in under pressure for first half of trade. However, Nifty showed smart revival in second half of trade to pare most of its loss. The recovery was not enough to bring market back into green terrain and it ended the session with a cut of over quarter a percent. The top gainers from the F&O segment were Aditya Birla Nuvo, Indiabulls Real Estate and NMDC. On the other hand, the top losers were Motherson Sumi Systems, United Spirits and Castrol 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 7900 put, heavy buildup was seen in the 7700 put. On the other hand, traders exited from 8300 Call, while 7800 call witnessed considerable OI addition.   

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.50% and reached 16.45. The 50-share Nifty was down by 20.60 points or 0.26% to settle at 7,870.15.   

Nifty May 2016 futures closed at 7879.30 on Tuesday at a premium of 9.15 points over spot closing of 7,870.15, while Nifty June 2016 futures ended at 7889.40 at a premium of 19.25 points over spot closing.  Nifty May futures saw contraction of 0.51 million (mn) units, taking the total outstanding open interest (OI) to 16.09 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 0.60 points at 180.60 compared with spot closing of 180.00. The number of contracts traded were 26,561.                

ICICI Bank May 2016 futures traded at a premium of 0.10 points at 226.90 compared with spot closing of 226.80. The number of contracts traded were 13,731.          

Punjab National Bank May 2016 futures traded at a premium of 0.10 points at 76.50 compared with spot closing of 76.40. The number of contracts traded were 29,485.  

Reliance Industries May 2016 futures traded at a premium of 3.35 points at 973.40 compared with spot closing of 970.05. The number of contracts traded were 9,757.                

HDFC Bank May 2016 futures traded at a premium of 1.45 points at 1142.65 compared with spot closing of 1,141.20. The number of contracts traded were 11,431.   

Among Nifty calls, 7900 SP from the May month expiry was the most active call with a contraction of 0.34 million open interests. Among Nifty puts, 7800 SP from the May month expiry was the most active put with an addition of 0.26 million open interests. The maximum OI outstanding for Calls was at 8000 SP (7.88 mn) and that for Puts was at 7800 SP (6.31 mn). The respective Support and Resistance levels of Nifty are: Resistance 8186.60 --- Pivot Point 8134.45--- Support --- 8093.20.             

The Nifty Put Call Ratio (PCR) finally stood at 0.93 for May month contract. The top five scrips with highest PCR on OI were Syndicate Bank (1.47), Indusind Bank (1.46), Indiabulls Real Estate (1.24), Axis Bank (1.16) and Punjab National Bank (1.16).  

Among most active underlying, Maruti Suzuki India witnessed an addition of 0.05 million of Open Interest in the May month futures contract, followed State Bank of India witnessing a contraction of 1.96 million of Open Interest in the May month contract; Punjab National Bank witnessed an addition of 0.78 million of Open Interest in the May month contract, JSW Steel witnessed an addition of 0.10 million of Open Interest in the May month contract and Axis Bank witnessed a contraction of 0.92 million units of Open Interest in the May month's future contract.