Nifty trims losses; ends above 8300 mark

Benchmark index Nifty ended lower on Friday as investors dumped riskier assets and fled to safe havens ahead of Friday’s US payrolls report that could sway expectations for the timing of the Federal Reserve’s next interest-rate increase. On the domestic front, sentiments were undermined after global financial services major stated that India’s economy may grow at a slightly slower pace of 7.4% this fiscal amid weaker global demand and risk aversion, flagging methodological concerns in computation of official GDP data. The report highlighted that some of the factors that are weighing on the economy include weaker global demand, banking sector risk aversion, sluggish domestic private investment, gradually climbing oil prices, and statistical auto-correction in growth prints. However, losses remain capped with the report that the government has decided to introduce the GST Bill on the first working day of the monsoon session of Parliament, in what could be a sign of its confidence that it can notch up the numbers for the long-pending legislation.

On the global front, Asian markets ended on a subdued note as investors turned jittery after slump in oil prices overnight on concerns of a gasoline oversupply, worries about the level of non-performing loans at Chinese banks, another terror attack in Bangladesh and a horrifying snipper attack in Dallas, Texas. However, the European stocks rose for a second day as the oil trimmed its biggest weekly decline in five months and dollar weakened against most of its major peers before a US jobs report that may set the tone for Federal Reserve monetary policy. 

Back home, after making a cautious start, the local benchmark Nifty soon drifted to lowest levels in the session due to profit booking in frontline blue-chip stocks amid weak Asian cues. Thereafter started the road to recovery for the index, which kept slowly but steadily moving towards the neutral line. However, some late hour profit booking followed by mild short covering ensured that the key index extend the consolidation period for second straight session. Finally, Nifty settled with trivial losses of fourteen points above the psychological 8,300 levels. Traders were seen piling position in Auto and IT stocks while selling was witnessed in Capital goods, Oil & Gas and PSU sector stocks. The top gainers from the F&O segment were Cadila Healthcare, Housing Development and Infrastructure and Power Finance Corporation. On the other hand, the top losers were Jaiprakash Associates, Unitech and PC Jeweller. In the index options segment, maximum OI was being seen in the 8200-8700 calls and 7900-8400 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.47% and reached 15.08. The 50-share Nifty was down by 14.70 points or 0.18% to settle at 8,323.20.

Nifty July 2016 futures closed at 8336.45 on Friday at a premium of 13.25 points over spot closing of 8,323.20, while Nifty August 2016 futures ended at 8373.35 at a premium of 50.15 points over spot closing. Nifty July futures saw contraction of 0.40 million (mn) units, taking the total outstanding open interest (OI) to 18.26 million (mn) units. The near month derivatives contract will expire on July 28, 2016.                                

From the most active contracts, State bank of India July 2016 futures traded at a premium of 1.10 points at 219.30 compared with spot closing of 218.20. The number of contracts traded were 15,010.   

Punjab National Bank of July 2016 futures traded at a discount of 0.55 points at 117.25 compared with spot closing of 117.80. The number of contracts traded were 9,794.    

Tata Motors  July 2016 futures traded at a premium of 1.05 points at 467.35 compared with spot closing of 466.30. The number of contracts traded were 9,347.             

Tata  Steel July 2016 futures traded at a discount of 5.90 points at 311.80 compared with spot closing of 317.70. The number of contracts traded were 11,804.   

Axis Bank July 2016 futures traded at a premium of 1.85 points at 547.25 compared with spot closing of 545.40. The number of contracts traded were 9,599. 

Among Nifty calls, 8400 SP from the July month expiry was the most active call with an addition of 0.27 million open interests. Among Nifty puts, 8300 SP from the July month expiry was the most active put with a contraction of 0.20 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.40 mn) and that for Puts was at 8100 SP (4.18 mn). The respective Support and Resistance levels of Nifty are: Resistance 8355.15--- Pivot Point 8321.35--- Support --- 8289.40.          

The Nifty Put Call Ratio (PCR) finally stood at 1.12 for July month contract. The top five scrips with highest PCR on OI were Grasim Industries (1.35), Mindtree(1.32), Vedanta (1.03), Oil India (0.95) and Britannia Industries (0.92).      

Among most active underlying Lupin witnessed an addition of 0.04 million of Open Interest in the July month futures contract, followed State Bank of India witnessing an addition of 1.36 million of Open Interest in the July month contract; Punjab National Bank witnessed a contraction of 0.02 million of Open Interest in the July month contract, Tata Steel witnessed a contraction of 1.59 million of Open Interest in the July month contract and Larsen & Toubro witnessed an addition of 0.01 million units of Open Interest in the July month's future contract.