Nifty ends slightly in green on Monday

Domestic equity index - Nifty ended marginally in green on Monday on account of buying by investors in blue chips counters. Investors' sentiment got some support with India Meteorological Department's PUNE centre report that the monsoon has bounced back emphatically and is on track for a strong run in the weeks ahead, cheering farmers who were rattled by the unexpected lean patch with rainfall 25% below normal in mid-June. The monsoon is expected to reach Punjab, Haryana, Delhi and parts of Rajasthan in a few days. Other regions of the country, which the monsoon has covered, are going to get good rainfall in next five days. Some support also came with Moody's Investors Service's statement that India's decision to relax foreign direct investment in sectors including defence, aviation, and retail is a positive development for the country's sovereign ratings. The announcement is credit positive because it demonstrates a continuation of reform momentum and paves the way for private investment and a boost in productivity. Meanwhile, Chief Economic Advisor Arvind Subramanian stated that Brexit, or Britain's exit from the European Union, was a sad development but India would not be affected by it due to India's solid macroeconomics.

However, gains remained capped due to uncertainty over Britain's decision to leave the European Union and Global crude oil prices extended losses. Weakness in global markets too capped gains. Asian markets ended mixed, as investors struggled to digest the world's fifth-largest economy, out of the European Union. Following above tandem, European markets were trading lower, with Germany's DAX was down by 1.65%, France's CAC was down by 1.47% and UK's FTSE 100 was down by 1.36%. Back home, after making cautious start, Indian equity benchmark traded in narrow range with Nifty kept altering between positive and negative territory for most part of the day's trades. Despite some volatility in late trade, market managed to keep its head above water.

The top gainers from the F&O segment were Aditya Birla Nuvo, Oriental Bank of Commerce and Biocon. On the other hand, the top losers were Tata Consultancy Services, Infosys and Zee Entertainment Enterprises. In the index options segment, maximum OI was being seen in the 8000-8500 calls and 7000-8100 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 8000 Call, while 8300 call witnessed considerable OI addition.    

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.52% and reached 18.53. The 50-share Nifty was up by 6.10 points or 0.08% to settle at 8,094.70.    

Nifty June 2016 futures closed at 8104.60 on Monday at a premium of 9.90 points over spot closing of 8,094.70, while Nifty July 2016 futures ended at 8134.50 at a premium of 39.80 points over spot closing.  Nifty June futures saw contraction of 1.31 million (mn) units, taking the total outstanding open interest (OI) to 12.12 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 0.80 points at 217.60 compared with spot closing of 216.80. The number of contracts traded were 45,979. 

ICICI Bank June 2016 futures traded at a premium of 1.05 points at 233.25 compared with spot closing of 232.20. The number of contracts traded were 18,902.                   

Tata Motors June 2016 futures traded at a premium of 2.50 points at 450.45 compared with spot closing of 447.95. The number of contracts traded were 23,766.            

HDFC Bank June 2016 futures traded at a discount of 8.90 points at 1151.10 compared with spot closing of 1,160.00. The number of contracts traded were 21,792.  

Reliance Industries June 2016 futures traded at a premium of 3.25 points at 957.15 compared with spot closing of 953.90. The number of contracts traded were 19,110.    

Among Nifty calls, 8100 SP from the June month expiry was the most active call with an addition of 0.13 million open interests. Among Nifty puts, 8000 SP from the June month expiry was the most active put with an addition of 0.79 million open interests. The maximum OI outstanding for Calls was at 8400 SP (6.05 mn) and that for Puts was at 8000 SP (7.38 mn). The respective Support and Resistance levels of Nifty are: Resistance 8130.45 --- Pivot Point 8084.90 --- Support --- 8049.15.             

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 Hindalco (1.38), Indusind Bank (1.32), Indo Count Industries (1.21), Dr Reddy (1.20) and Apollo Hospital (1.22). 

Among most active underlying, State Bank of India witnessed a contraction of 15.69 million of Open Interest in the June month futures contract, followed Tata Motors  witnessing a contraction of 1.79 million of Open Interest in the June month contract; HDFC Bank witnessed a contraction of 7.58 million of Open Interest in the June month contract, Reliance Industries witnessed a contraction of 4.72 million of Open Interest in the June month contract and Sun Pharmaceuticals Industries witnessed a contraction of 2.72 million units of Open Interest in the June month's future contract.