Nifty ends below 8,200 level ahead of IIP data

Domestic equity index -- Nifty ended lower on Friday on account of selling in the frontline blue chips counters amid weak cues from  global markets as investors remained wary ahead of the US Federal Reserve meet and worries regarding a UK referendum that could push Britain out of the European Union. Sentiments also maintained cautious stance ahead of industrial production data for April which is scheduled to be released later in the day. Besides, caution also prevailed in the market with the report that monsoon rains in India were 18 per cent below average in the week to June 8, as the onset of rainfall was delayed by nearly a week from its usual arrival on June 1, 2016. However, losses remained capped with Union Home Minister Rajnath Singh’s statement that the India is the fastest growing economy in the world with the country witnessing more investments in past financial year than China and the United States. Investors also got some support with report that a group of central and state government officials set up to frame the law for the proposed goods and services tax (GST) has submitted its final draft that could be taken up at a meeting of the empowered committee of state finance ministers next week. Meanwhile, shares of sugar companies rallied after the Food Minister Ram Vilas Paswan has said that the government is planning to impose 25% duty on export of sugar to ensure sufficient supply in the domestic market.

On the global front, Asian markets ended mostly lower on Friday in thin holiday trade as uncertainty over Brexit referendum and caution ahead of a slew of Chinese data due this weekend and central bank meetings in the US and Japan next week. Markets in mainland China and Taiwan remained closed for the Dragon Boat Festival. European markets were trading lower for a third straight day to a two-week on Friday, with Lufthansa falling after a surprise announcement that its chief financial officer will be leaving, while persistent political concerns put pressure on cyclical stocks on the last trading day of the week. Moreover, a weaker commodities prices putting further pressure on mining and energy stocks.

Back home, after making a weak opening, Indian equity market gained movement and entered into positive territory and traded in fine fettle for first half. However, market once again entered in negative zone and continued to trade in red till end.  Finally, Nifty ended with cut of over 33 points. The top gainers from the F&O segment were Jaiprakash Associates, Unitech and Hindalco Industries. On the other hand, the top losers were Indiabulls Real Estate, Jubilant Foodworks and Indiabulls Housing Finance. 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 8300 put, heavy buildup was seen in the 8000 put. On the other hand, traders exited from 8400 Call, while 9000 call witnessed considerable OI addition.    

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 1.90% and reached 15.97. The 50-share Nifty was down by 33.55 points or 0.41% to settle at 8,170.05.    

Nifty June 2016 futures closed at 8190.40 on Friday at a premium of 20.35 points over spot closing of 8,170.05, while Nifty July 2016 futures ended at 8220.55 at a premium of 50.50 points over spot closing.  Nifty June futures saw contraction of 0.02 million (mn) units, taking the total outstanding open interest (OI) to 21.48 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 discount of 0.20 points at 206.30 compared with spot closing of 206.10. The number of contracts traded were 33,086.                  

ICICI Bank June 2016 futures traded at a discount of 3.90 points at 248.90 compared with spot closing of 252.80. The number of contracts traded were 15,346.            

Vedanta June 2016 futures traded at a premium of 0.70 points at 117.05 compared with spot closing of 116.35. The number of contracts traded were 12,445.  

Bharat Heavy Electricals June 2016 futures traded at a premium of 0.35 points at 123.95 compared with spot closing of 123.60. The number of contracts traded were 13,219.                

Tata Motors June 2016 futures traded at a premium of 1.85 points at 459.25 compared with spot closing of 457.40. The number of contracts traded were 12,817.

Among Nifty calls, 8300 SP from the June month expiry was the most active call with an addition of 0.33 million open interests. Among Nifty puts, 8200 SP from the June month expiry was the most active put with an addition of 0.05 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.52 mn) and that for Puts was at 8000 SP (6.92 mn). The respective Support and Resistance levels of Nifty are: Resistance 8236.15 --- Pivot Point 8199.50 --- Support --- 8133.40.             

The Nifty Put Call Ratio (PCR) finally stood at 1.25 for June month contract. The top five scrips with highest PCR on OI were Apollo Hospital (1.76), Indusind Bank (1.27), Hindalco (1.22), Maruti Suzuki India (1.15) and JSW (1.09).    

Among most active underlying, State Bank of India witnessed a contraction of 2.57 million of Open Interest in the June month futures contract, followed Yes Bank witnessing an addition of 0.04 million of Open Interest in the June month contract; Tata Motors  witnessed a contraction of 1.57 million of Open Interest in the June month contract, Reliance Industries witnessed a contraction of 0.86 million of Open Interest in the June month contract and Tata Steel witnessed a contraction of 0.59 million units of Open Interest in the June month's future contract.