Nifty ends higher on Tuesday amid firm global cues

Domestic equity index - Nifty ended higher on Tuesday on the back of firm cues from the global markets. Market participants got some encouragement after the Economic Affairs Secretary Shaktikanta Das said that the India is poised for a 'big leap' in growth which could touch 8% in the current fiscal on the back of normal monsoon. Hopes that India will see above-average south-west monsoon rains after two years of drought too bolstered optimism about the domestic economy, helping offset some of the global volatility tied to Britain's vote to leave the European Union last week. Stronger rains, besides benefiting the key rural sector, could also cool down food prices, raising the prospect that the Reserve Bank of India would be more willing to cut interest rates again later this year. Sentiment also remained optimistic with report that finance ministry has initiated the process of constituting a monetary policy committee (MPC), bringing into force the relevant amendments in the Reserve Bank of India (RBI) Act from Monday.

On the global front, after crashing for two straight days, Asian markets ended mostly higher as investors scooped up beaten down stocks at attractive levels. European markets rose for the first time in three days on Tuesday after a heavy sell-off following Britain's shock vote to leave the European Union, on hopes of a more co-ordinated central bank response to financial market losses and on firmer oil prices.

Back home, after getting flat to positive opening, Indian equity benchmark traded in tight band till afternoon session. Thereafter, market extended its gains and traded with traction on the back of firm cues from the European counterparts. Finally, Nifty ended the session with gains of over 30 points. The top gainers from the F&O segment were Adani Enterprises, Unitech and Lupin. On the other hand, the top losers were Just Dial, HCL Technologies and Tata Motors. 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 7400 put, heavy buildup was seen in the 8100 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 4.34% and reached 17.72. The 50-share Nifty was up by 33.15 points or 0.41% to settle at 8,127.85.    

Nifty June 2016 futures closed at 8136.05 on Tuesday at a premium of 8.20 points over spot closing of 8,127.85, while Nifty July 2016 futures ended at 8166.55 at a premium of 38.70 points over spot closing. Nifty June futures saw contraction of 1.36 million (mn) units, taking the total outstanding open interest (OI) to 10.75 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 1.05 points at 216.75 compared with spot closing of 215.70. The number of contracts traded were 34,506. 

ICICI Bank June 2016 futures traded at a premium of 0.15 points at 233.65 compared with spot closing of 233.50. The number of contracts traded were 16,741.                   

Bank of Baroda June 2016 futures traded at a premium of 0.90 points at 154.90 compared with spot closing of 154.00. The number of contracts traded were 14,291.            

Tata Motors June 2016 futures traded at a premium of 0.65 points at 441.65 compared with spot closing of 441.00. The number of contracts traded were 17,712.  

Axis Bank June 2016 futures traded at a premium of 2.35 points at 515.35 compared with spot closing of 513.00. The number of contracts traded were 15,888.      

Among Nifty calls, 8200 SP from the June month expiry was the most active call with an addition of 0.56 million open interests. Among Nifty puts, 8000 SP from the June month expiry was the most active put with a contraction of 0.21 million open interests. The maximum OI outstanding for Calls was at 8400 SP (5.97 mn) and that for Puts was at 8000 SP (7.40 mn). The respective Support and Resistance levels of Nifty are: Resistance 8153.85 --- Pivot Point 8120.35 --- Support --- 8094.35.                

The Nifty Put Call Ratio (PCR) finally stood at 1.21 for June month contract. The top five scrips with highest PCR on OI were Bosch (2.00), Indusind Bank (1.62), Indo Count Industries (1.42), Container Corporation of India (1.37) and Hindalco (1.30). 

Among most active underlying, State Bank of India witnessed a contraction of 11.05 million of Open Interest in the June month futures contract, followed Tata Motors  witnessing a contraction of 2.20 million of Open Interest in the June month contract; HDFC Bank witnessed a contraction of 5.16 million of Open Interest in the June month contract, Tata Steel witnessed a contraction of 1.67 million of Open Interest in the June month contract and Axis Bank witnessed a contraction of 6.27 million units of Open Interest in the June month's future contract.