Nifty ends lower ahead of RBI's monetary policy review

Domestic equity index -- Nifty ended with modest loss, as market participants maintained cautious approach ahead of Reserve Bank of India's monetary policy review due on Tuesday. Investors' sentiments were subdued with the survey from industry body, CII has said that government needs to speed up implementation of GST, address the issue of cheap imports and improve investment climate as majority of sectors are witnessing 'moderate' growth.  However, downside remained capped after Finance Minister Arun Jaitley stressed that India's economy has become stronger and the government is trying to bridge the gaps wherever there are any, to keep up the growth momentum. Further, some support also came in with the Global Retail Development Index (GRDI) report that India has jumped 13 positions from last year to rank second among 30 developing countries this year on ease of doing business. The second rank is on the back of pick up in GDP growth and better clarity regarding FDI regulations. GRDI is an annual study that ranks the top 30 developing countries for retail expansion worldwide.

On the global front, Asian markets ended mostly higher, after US nonfarm payrolls data showed the slowest job growth in more than five years, quashing expectations for a near-term US interest rate hike by the US Federal Reserve. European markets were trading mostly in green with UK's FTSE 100 was up by 0.85% and Germany's DAX was up by 0.03%, while France's CAC was down by 0.14%.

After making a positive opening, benchmark has traded near neutral line for the most part of day's trade. Even though some mild selling was witnessed in the last leg of trade; the market recovered most of its loss by the end of the session. Finally, Nifty ended with loss of over 19 points. The top gainers from the F&O segment were The Karnataka Bank, PTC India and The Federal Bank. On the other hand, the top losers were Godrej Consumer Products, Glenmark Pharmaceuticals and NHPC. In the index options segment, maximum OI was being seen in the 8000-8600 calls and 7000-8200 puts. In today's session, while the traders preferred to exit 8000 put, heavy buildup was seen in the 8200 put. On the other hand, traders exited from 7500 Call, while 8300 call witnessed considerable OI addition.   

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.40% and reached 15.35. The 50-share Nifty was down by 19.75 points or 0.24% to settle at 8,201.05.   

Nifty June 2016 futures closed at 8229.80 on Monday at a premium of 28.75 points over spot closing of 8,201.05, while Nifty July 2016 futures ended at 8255.55 at a premium of 54.50 points over spot closing. Nifty June futures saw contraction of 0.20 million (mn) units, taking the total outstanding open interest (OI) to 20.09 million (mn) units. The near month derivatives contract will expire on June 30, 2016.                              

From the most active contracts, State Bank of India June 2016 futures traded at a premium of 1.05 points at 199.80compared with spot closing of 198.75. The number of contracts traded were 28,079.                

ICICI Bank June 2016 futures traded at a discount of 3.40 points at 239.95 compared with spot closing of 243.35. The number of contracts traded were 10,155.            

Bank of Baroda June 2016 futures traded at a premium of 0.05 points at 143.70 compared with spot closing of 143.65. The number of contracts traded were 7,340.  

Tata Motors June 2016 futures traded at a premium of 0.75 points at 132.80 compared with spot closing of 132.05. The number of contracts traded were 11,710.                

Axis Bank June 2016 futures traded at a premium of 3.00 points at 536.60 compared with spot closing of 533.60. The number of contracts traded were 12,672.    

Among Nifty calls, 8300 SP from the June month expiry was the most active call with an addition of 0.18 million open interests. Among Nifty puts, 8200 SP from the June month expiry was the most active put with an addition of 0.46 million open interests. The maximum OI outstanding for Calls was at 8300 SP (4.64 mn) and that for Puts was at 8000 SP (5.99 mn). The respective Support and Resistance levels of Nifty are: Resistance 8228.48 --- Pivot Point 8207.27 --- Support --- 8179.83.             

The Nifty Put Call Ratio (PCR) finally stood at 1.18 for June month contract. The top five scrips with highest PCR on OI were Apollo Hospital (1.44), Maruti Suzuki India (1.27), Indusind Bank (1.26), Yes bank (1.20) and United Breweries (1.12).   

Among most active underlying, State Bank of India witnessed an addition of 2.07 million of Open Interest in the June month futures contract, followed Tata Motors  witnessing a contraction of 0.94 million of Open Interest in the June month contract; Yes Bank  witnessed an addition of 0.19 million of Open Interest in the June month contract, Tata Steel witnessed a contraction of 1.32 million of Open Interest in the June month contract and Maruti Suzuki India  witnessed a cont