Nifty ends marginally lower on Tuesday on profit-booking

Domestic equity index - Nifty - ended marginally lower on Tuesday as investors booked some of the profit after two days of continuous rally. Traders remained cautious ahead of Thursday's British vote, as well as Federal Reserve chief Janet Yellen's two-day testimony before Congress starting later on Tuesday, she might offer clues on the timing of the next US interest rate increase. However, losses remained capped with report of good advancement of monsoon, which after a delay is now romping its way through central and north India. Monsoon rains have covered nearly half of the country, accelerating planting of summer crops like paddy rice, soybeans, cotton and pulses. The June to September monsoon is crucial for farm output and economic growth in India, where just over half of arable land is fed by rain. Latest Foreign Direct Investment (FDI) regime for a host of important sectors including defence, civil aviation and pharmaceuticals capped the downside. On the global front, Asian markets rose on Tuesday as investors take a breather after a rally triggered by growing expectations that British voters will choose to remain in the European Union in the referendum due on Thursday. European markets were trading higher, with France's CAC was up by 0.67%, Germany's DAX was up by 0.57% and UK's FTSE 100 was up by 0.02%, although commodities-related stocks came under pressure following a drop in mining and energy shares.

Back home, after making weak opening Nifty continued to trade in a tight band with negative bias throughout session. Finally, Nifty ended the session below 20 points. The top gainers from the F&O segment were Arvind, Century Textiles & Industries and KPIT Technologies. On the other hand, the top losers were Ajanta Pharma, Vedanta and Aurobindo Pharma. 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 7900 put, heavy buildup was seen in the 8000 put. On the other hand, traders exited from 8300 Call, while 8400 call witnessed considerable OI addition.    

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.47% and reached 17.26. The 50-share Nifty was down by 18.60 points or 0.23% to settle at 8,219.90.    

Nifty June 2016 futures closed at 8225.10 on Tuesday at a premium of 5.20 points over spot closing of 8,219.90, while Nifty July 2016 futures ended at 8253.80 at a premium of 33.90 points over spot closing. Nifty June futures saw contraction of 0.58 million (mn) units, taking the total outstanding open interest (OI) to 16.89 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 0.45 points at 213.85 compared with spot closing of 213.40. The number of contracts traded were 25,022.                  

ICICI Bank June 2016 futures traded at a premium of 0.70 points at 238.85 compared with spot closing of 238.15. The number of contracts traded were 15,791.             

Rural Electrification Corporation June 2016 futures traded at a premium of 0.80 points at 170.95 compared with spot closing of 170.15. The number of contracts traded were 10,676.  

Punjab National Bank June 2016 futures traded at a discount of 1.30 points at 95.70 compared with spot closing of 97.00. The number of contracts traded were 9,053.                 

Axis Bank June 2016 futures traded at a premium of 3.50 points at 519.25 compared with spot closing of 515.75. The number of contracts traded were 11,020.   

Among Nifty calls, 8300 SP from the June month expiry was the most active call with a contraction of 0.20 million open interests. Among Nifty puts, 8100 SP from the June month expiry was the most active put with an addition of 0.15 million open interests. The maximum OI outstanding for Calls was at 8300 SP (6.09 mn) and that for Puts was at 8000 SP (8.07 mn). The respective Support and Resistance levels of Nifty are: Resistance 8250.72 --- Pivot Point 8226.43 --- Support --- 8195.62.             

The Nifty Put Call Ratio (PCR) finally stood at 1.30 for June month contract. The top five scrips with highest PCR on OI were Indo Count Industries (1.70), Hindalco (1.39), Apollo Hospital (1.33), Indusind Bank (1.32) and Container Corporation of India (1.19). 

Among most active underlying, Tata Motors  witnessed a contraction of 0.94 million of Open Interest in the June month futures contract, followed State Bank of India witnessing a contraction of 0.77 million of Open Interest in the June month contract; Jet Airways (India) witnessed an addition of 0.41 million of Open Interest in the June month contract, Reliance Industries witnessed a contraction of 0.42 million of Open Interest in the June month contract and ICICI Bank witnessed a contraction of 1.67 million units of Open Interest in the June month's future contract.