Nifty ends lower for second straight session on Wednesday

Domestic equity index - Nifty ended lower on Wednesday on account of selling by investors in the frontline blue chips counters. Investors’ sentiment remained cautious ahead of tomorrow's crucial referendum that will decide whether Britain will stay in the European Union or not. Further, US Federal Reserve Chair Janet Yellen has said that the Federal Reserve will be cautious about interest rate increases until it is clear the job market is holding up. However, losses remained capped with an UNCTAD report, stating that India’s foreign direct investment is likely to cross $60 billion this year on a favourable policy environment even as the FDI flows globally are set to witness a decline. It has said that the large increase of announced greenfield investments in manufacturing industries may provide further impetus to FDI this year. Moreover, investors got some relief with report that the monsoon finally hit most parts of Maharashtra and central India. With this, sowing of kharif crops like paddy, cotton, maize, oilseeds and pulses are expected to gather pace. Monsoon is expected to cover south Gujarat, parts of Madhya Pradesh, East Uttar Pradesh and Bihar in the next 48 hours. There will be better rainfall during the next 15 days over central India.

On the global front, Asian markets ended higher as investors remained wary ahead of the vote on Britain's possible exit from the European Union. European markets were trading higher, with two key regional indexes hitting their highest level in more than two weeks, as firmer financial stocks led markets higher. Back home, after making weak opening, Indian equity benchmark traded in tight band altering between positive and negative territory for most part of the day's trade. Bout of volatility witnessed in last leg of trade which dragged market near its intraday lows, but key gauge got some support near that intraday low level, trimming some of its losses from thereon as investors continued hunt for fundamentally strong stocks. Finally, Nifty ended with loss of two tenth of a percent.

The top gainers from the F&O segment were Hexaware Technologies, Petronet LNG and Adani Ports and Special Economic Zone. On the other hand, the top losers were JSW Energy, Tata Motors and Jaiprakash Associates. In the index options segment, maximum OI was being seen in the 8100-8600 calls and 7000-8200 puts. In today's session, while the traders preferred to exit 8200 put, heavy buildup was seen in the 8000 put. On the other hand, traders exited from 8100 Call, while 8250 call witnessed considerable OI addition.    

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 5.36% and reached 18.18. The 50-share Nifty was down by 16.20 points or 0.20% to settle at 8,203.70.    

Nifty June 2016 futures closed at 8205.05 on Wednesday at a premium of 1.35 points over spot closing of 8,203.70, while Nifty July 2016 futures ended at 8233.45 at a premium of 29.75 points over spot closing.  Nifty June futures saw contraction of 1.33 million (mn) units, taking the total outstanding open interest (OI) to 15.56 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 0.25 points at 212.65 compared with spot closing of 212.90. The number of contracts traded were 22,933.                  

ICICI Bank June 2016 futures traded at a premium of 0.40 points at 239.40 compared with spot closing of 239.00. The number of contracts traded were 14,071. 

Axis Bank June 2016 futures traded at a premium of 0.75 points at 517.65 compared with spot closing of 516.90. The number of contracts traded were 10,629.                  

Tata Motors June 2016 futures traded at a premium of 1.75 points at 473.75 compared with spot closing of 472.00. The number of contracts traded were 15,732.           

Reliance Industries June 2016 futures traded at a premium of 2.85 points at 980.85 compared with spot closing of 978.00. The number of contracts traded were 9,399.  

Among Nifty calls, 8300 SP from the June month expiry was the most active call with an addition of 0.17 million open interests. Among Nifty puts, 8100 SP from the June month expiry was the most active put with a contraction of 0.35 million open interests. The maximum OI outstanding for Calls was at 8300 SP (6.26 mn) and that for Puts was at 8000 SP (8.54 mn). The respective Support and Resistance levels of Nifty are: Resistance 8243.62 --- Pivot Point 8198.43 --- Support --- 8158.52.             

The Nifty Put Call Ratio (PCR) finally stood at 1.27 for June month contract. The top five scrips with highest PCR on OI were Hindalco (1.39), Apollo Hospital (1.33), Indusind Bank (1.27), Indo Count Industries (1.21) and Container Corporation of India (1.21).  

Among most active underlying, Tata Motors  witnessed a contraction of 0.76 million of Open Interest in the June month futures contract, followed State Bank of India witnessing a contraction of 2.83 million of Open Interest in the June month contract; Arvind  witnessed an addition of 0.81 million of Open Interest in the June month contract, Tata Steel witnessed a contraction of 0.02 million of Open Interest in the June month contract and Yes Bank  witnessed a contraction of 0.29 million units of Open Interest in the June month's future contract.