Feeble global cues drags Nifty lower

Domestic equity index -- Nifty - ended lower on Monday on account of sustained selling by funds and retail investors in the front line blue chips counters amid weak cues from the global markets, as investors remained worried ahead of key international events like a referendum vote on a possible British exit from Eurozone on June 23 and US Federal Reserve monetary policy meet which starts tomorrow. On the domestic front, profit booking by domestic institutional investors and retail players also weighed on the market sentiment. Investors' sentiment remained impacted by the weaker-than-expected industrial output data, released after trading hours on Friday showed industrial output contracted by 0.8 per cent in April, the first decline in three months, due to drastic fall in capital goods production and manufacturing activities. Further, traders kept their eyes on Key macroeconomic data i.e. consumer price index (CPI) and inflation based on the wholesale price index (WPI) for May to be released today and tomorrow, respectively.

On the global front, Asian markets ended as investors remained on sidelines ahead of a policy announcement later this week from the U.S. Federal Reserve, which could hike interest rates. The Bank of Japan is also due for a policy announcement mid-week. Following above tandem, European markets were trading lower, with France's CAC was down by 1.39%, Germany's DAX was down by 1.31% and UK's FTSE 100 was down by 0.73%.

Back home, after getting gap down opening, Indian equity benchmark has extended its losses and traded lackluster throughout the day's trade. However, Nifty recovered some of their losses in the afternoon deal to end off day's low with a loss of around 60 points. The top gainers from the F&O segment were Unitech, Jaiprakash Associates and Mcleod Russel. On the other hand, the top losers were Cairn India, Jindal Steel & Power and IDFC. 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 8100 put, heavy buildup was seen in the 7800 put. On the other hand, traders exited from 8500 Call, while 8100 call witnessed considerable OI addition.    

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 3.84% and reached 16.58. The 50-share Nifty was down by 59.45 points or 0.73% to settle at 8,110.60.    

Nifty June 2016 futures closed at 8130.65 on Monday at a premium of 20.35 points over spot closing of 8,110.60, while Nifty July 2016 futures ended at 8157.35 at a premium of 46.75 points over spot closing. Nifty June futures saw contraction of 0.72 million (mn) units, taking the total outstanding open interest (OI) to 20.75 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 0.05 points at 202.55 compared with spot closing of 202.50. The number of contracts traded were 28,146.                  

ICICI Bank June 2016 futures traded at a discount of 4.00 points at 240.15 compared with spot closing of 244.15. The number of contracts traded were 17,550.            

Tata Motors June 2016 futures traded at a premium of 1.80 points at 446.35 compared with spot closing of 444.55. The number of contracts traded were 16,509.  

Axis Bank June 2016 futures traded at a premium of 2.35 points at 533.85 compared with spot closing of 531.50. The number of contracts traded were 12,978.                

Reliance Industries June 2016 futures traded at a premium of 2.60 points at 982.60 compared with spot closing of 980.00. The number of contracts traded were 12,565. 

Among Nifty calls, 8200 SP from the June month expiry was the most active call with an addition of 0.18 million open interests. Among Nifty puts, 8000 SP from the June month expiry was the most active put with an addition of 0.25 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.53 mn) and that for Puts was at 8000 SP (7.18 mn). The respective Support and Resistance levels of Nifty are: Resistance 8135.93 --- Pivot Point 8099.92 --- Support --- 8074.58.             

The Nifty Put Call Ratio (PCR) finally stood at 1.23 for June month contract. The top five scrips with highest PCR on OI were Apollo Hospital (1.58), Indusind Bank (1.29), Hindalco (1.14), Maruti Suzuki India (1.11) and Container Corporation of India (1.05).    

Among most active underlying, State Bank of India witnessed a contraction of 1.59 million of Open Interest in the June month futures contract, followed Tata Motors witnessing a contraction of 0.66 million of Open Interest in the June month contract; Yes Bank witnessed an addition of 0.18 million of Open Interest in the June month contract, Reliance Industries witnessed a contraction of 0.26 million of Open Interest in the June month contract and Tata Steel witnessed an addition of 0.45 million units of Open Interest in the June month's future contract.