Nifty ends flat as global concerns persist

Domestic equity index - Nifty ended the Tuesday’s session flat amid weak global cues. Sentiment remained downbeat on the back of higher-than-expected consumer inflation and rise in the wholesale price index (WPI) based inflation for the second straight month. WPI for May rose to 0.79 per cent from 0.34 per cent in April owing to higher food and manufactured products cost. Sentiment also remained dampened after the India Meteorological Department (IMD) report suggested that the progress of southwest monsoon is relatively slow as it is not getting a favourable system to move forward, but days of heat wave condition in central and northwest India will soon be over as pre-monsoon showers will bring moisture in the air. Sentiment also remained subdued with India’s Consumer Price Index (CPI)-based inflation for the month of May 2016 rising to 5.76%, the highest in 19 months, and the most since the new series of retail inflation with base year of 2012 was introduced from January 2015. However, losses remained capped with the Minister of State for Finance Jayant Sinha’s statement that the government has enough backing from smaller regional parties to pass the Bill in Rajya Sabha without support from the main opposition Congress party and if we can pass it in the monsoon session of Parliament, then we can implement it in April 1, 2017. Some support also came on the hopes of a further push to the goods and services tax bill by finance minister Arun Jaitely.

On the global front, Asian markets ended mostly lower, as investors eagerly awaiting the outcome of the US Fed’s two-day meet scheduled to begin later today and the growing possibility that the UK might leave the European Union kept investors edgy throughout the session. European markets fell for a fifth straight session to a new three-month low, led down by commodities stocks, with France's CAC was down by 1.30%, UK's FTSE 100 down by 1.19% and Germany's DAX was down by 0.66%.

Back home, after making positive opening, Indian equity benchmark entered into negative territory and traded in tight range throughout the session. Market extended its losses in noon deals to hit intraday lows but got some support near that level to recoup most of its losses to end tad below its neutral line.

The top gainers from the F&O segment were Jaiprakash Associates, Punjab National Bank and Unitech. On the other hand, the top losers were KPIT Technologies, SRF and UltraTech Cement. In the index options segment, maximum OI was being seen in the 8000-8500 calls and 7000-8200 puts. In today's session, while the traders preferred to exit 8100 put, heavy buildup was seen in the 7700 put. On the other hand, traders exited from 8000 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 3.66% and reached 17.19. The 50-share Nifty was down by 1.75 points or 0.02% to settle at 8,108.85.    

Nifty June 2016 futures closed at 8120.55 on Tuesday at a premium of 11.70 points over spot closing of 8,108.85, while Nifty July 2016 futures ended at 8148.95 at a premium of 40.10 points over spot closing.  Nifty June futures saw contraction of 1.64 million (mn) units, taking the total outstanding open interest (OI) to 19.11 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 0.10 points at 208.10 compared with spot closing of 208.20. The number of contracts traded were 30,328.                  

ICICI Bank June 2016 futures traded at a discount of 4.05 points at 241.25 compared with spot closing of 245.30. The number of contracts traded were 13,619.            

Bank of Baroda June 2016 futures traded at a premium of 0.75 points at 149.35 compared with spot closing of 148.60. The number of contracts traded were 8,615.  

Punjab National Bank June 2016 futures traded at a discount of 0.25 points at 88.75 compared with spot closing of 90.00. The number of contracts traded were 13,159.                

Axis Bank June 2016 futures traded at a premium of 3.20 points at 532.40 compared with spot closing of 529.20. The number of contracts traded were 10,686.  

Among Nifty calls, 8200 SP from the June month expiry was the most active call with an addition of 0.12 million open interests. Among Nifty puts, 8000 SP from the June month expiry was the most active put with a contraction of 0.47 million open interests. The maximum OI outstanding for Calls was at 8300 SP (6.07 mn) and that for Puts was at 8000 SP (6.70 mn). The respective Support and Resistance levels of Nifty are: Resistance 8139.37 --- Pivot Point 8104.43 --- Support --- 8073.92.             

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 (1.59), Container Corporation of India (1.26), Indusind Bank (1.26), Hindalco (1.13) and Yes Bank (1.03).    

Among most active underlying, State Bank of India witnessed an addition of 1.95 million of Open Interest in the June month futures contract, followed Tata Motors witnessing a contraction of 0.98 million of Open Interest in the June month contract; Yes Bank witnessed a contraction of 0.05 million of Open Interest in the June month contract, Tata Steel witnessed an addition of 0.24 million of Open Interest in the June month contract and Reliance Industries witnessed a contraction of 0.16 million units of Open Interest in the June month's future contract.