Nifty ends lower on Thursday

The domestic equity index -- Nifty -- lower over a percent on Thursday on account of persistent selling by funds and retail investors in the blue chip counters amid weak cues from global markets after FOMC meeting minutes raised case of an interest rate hike in the near future. A win for the Bharatiya Janata Party (BJP) in Assam failed to uplift the mood on the street after a downfall in the global equities amid decline in the crude oil prices.  The selling in the banking shares and depreciating rupee against dollar too dampened investor’s sentiment. The rupee plummeted 34 paise against the US dollar to 67.32 at the time of equity markets closing, its weakest level since March due to appreciation of the American currency overseas amid foreign fund outflows.  Besides, investors also overlooked Moody’s Investors Service report that forecasted Indian economy to grow 7.5 per cent in the current and next year, enlightening that the expansion is primarily driven by rising consumption and sustained improvement in private investment was needed to maintain the momentum.

On the global front, Asian markets ended mostly lower, as risk sentiment hurt by falling commodity prices and a surging dollar, after the Federal Reserve’s April meeting minutes revealed ‘most’ members have a strong bias for raising rates as early as June, based on how the economy evolves. Following above tandem, European market were trading lower with UK’s FTSE 100 was down by 1.28%, Germany’s DAX was down by 1.02% and France’s CAC was down by 0.75%.

Back home, after making a weak opening Indian equity market has extended its loss and continued to trade in red throughout the session. Finally, Nifty ended with loss of over 86 points. The top gainers from the F&O segment were PTC India, Indian Oil Corporation and Cadila Healthcare. On the other hand, the top losers were Sun TV Network, Adani Ports and Special Economic Zone and Dewan Housing Finance Corporation. 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 7500 put. On the other hand, traders exited from 8400 Call, while 7900 call witnessed considerable OI addition.   

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 3.69% and reached 17.06. The 50-share Nifty was down by 86.75 points or 1.10% to settle at 7,783.40.   

Nifty May 2016 futures closed at 7785.10 on Thursday at a premium of 1.70 points over spot closing of 7,783.40, while Nifty June 2016 futures ended at 7794.65 at a premium of 11.25 points over spot closing. Nifty May futures saw addition of 0.40 million (mn) units, taking the total outstanding open interest (OI) to 16.49 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 0.55 points at 172.95 compared with spot closing of 172.40. The number of contracts traded were 23,843.                

ICICI Bank May 2016 futures traded at a premium of 0.35 points at 225.55 compared with spot closing of 225.20. The number of contracts traded were 17,243.          

Tata Steel May 2016 futures traded at a premium of 1.30 points at 326.80 compared with spot closing of 325.50. The number of contracts traded were 15,754.  

Reliance Industries May 2016 futures traded at a premium of 4.85 points at 951.85 compared with spot closing of 947.00. The number of contracts traded were 16,262.                

Housing Development and Infrastructure May 2016 futures traded at a premium of 0.25 points at 92.15 compared with spot closing of 91.90. The number of contracts traded were 13,354.          

Among Nifty calls, 7900 SP from the May month expiry was the most active call with an addition of 2.30 million open interests. Among Nifty puts, 7800 SP from the May month expiry was the most active put with a contraction of 1.32 million open interests. The maximum OI outstanding for Calls was at 8000 SP (9.83 mn) and that for Puts was at 7700 SP (5.67 mn). The respective Support and Resistance levels of Nifty are: Resistance 7850.80 --- Pivot Point 7808.80 --- Support --- 7741.40.             

The Nifty Put Call Ratio (PCR) finally stood at 0.78 for May month contract. The top five scrips with highest PCR on OI were Indiabulls Real Estate (1.41), Indusind Bank (1.36), Syndicate Bank (1.27), UCO Bank (1.11) and Indian Overseas Bank (1.07).  

Among most active underlying, Lupin witnessed a contraction of 0.10 million of Open Interest in the May month futures contract, followed Sun TV Network witnessing a contraction of 0.04 million of Open Interest in the May month contract; State Bank of India witnessed an addition of 2.38 million of Open Interest in the May month contract, Reliance Industries witnessed a contraction of 0.19 million of Open Interest in the May month contract and Tata Steel witnessed a contraction of 0.48 million units of Open Interest in the May month's future contract.