Nifty ends flat with negative bias

The local benchmark, Nifty edged lower on Wednesday as investors booked profit after the mixed macro data was announced yesterday. While, industrial production recovered, growing by 1.2 percent in May compared to (-) 0.8 percent in April, the retail inflation based on Consumer Price Index (CPI) rose marginally to 5.77 percent in June as against 5.76 percent in May, dampening hopes of a rate cut in August by the central bank. Uncertainty also prevailed in the market with main opposition Congress ahead of the Monsoon session of Parliament, stating that there is no change in its stand on the three principal demands on the Goods and Services Tax (GST) bill and it is still awaiting the government's offer on the issue. However, sentiments got some support with report that monsoon rains have covered the entire country, two days ahead of schedule despite the week-long delay in its onset. Also, sowing of kharif crops has gathered pace across the country, raising hopes of higher growth in businesses dependent on the farm sector and lower dependence on imports for commodities such as cotton, maize and soyabean. 

On global front, Asian markets ended mostly in green on Wednesday as prospects of solid US growth and accommodative economic policy in major countries whet investors' risk appetite damaged by uncertainty from Brexit. Further, European counterparts too are trading in the positive territory with France’s CAC being the top gainer in the space. Back home, after getting a positive start, Nifty showed some strength in early trades, but the sentiments turned pessimistic in late morning trades and index start drifting lower, as investors opted for caution ahead of quarterly results. Thereafter, the index traded around the neutral line in a very tight band through the day’s trade. Finally, Nifty ended the choppy day of trade on a flat note with a negative bias. 

Traders were seen piling position in Metal, IT and Oil & Gas stocks while selling was witnessed in Realty, Power and Consumer Durables sector stocks. Some buying also witnessed in upstream companies after the report that the oil companies have received the green signal to increase kerosene price by 25 paise every month till April 2017, while footwear stocks also gained on the report that the government is working on a package of both fiscal and non-fiscal measures for leather and non-leather footwear sector.The top gainers from the F&O segment were GMR Infrastructure, Tata Steel and GAIL (India). On the other hand, the top losers were TV18 Broadcast, Housing Development and Infrastructure and Indiabulls Housing Finance. In the index options segment, maximum OI was being seen in the 8400-8900 calls and 7800-8900 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 3.66% and reached 15.32. The 50-share Nifty was down by 1.55 points or 0.02% to settle at 8,519.50.

Nifty July 2016 futures closed at 8520.05 on Tuesday   at a premium of 0.55 points over spot closing of 8,519.50, while Nifty August 2016 futures ended at 8554.95 at a premium of 35.44 points over spot closing. Nifty July futures saw addition of 0.17 million (mn) units, taking the total outstanding open interest (OI) to 21.43 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 0.85 points at 227.60 compared with spot closing of 226.75. The number of contracts traded were 19,876. 

Vedanta of July 2016 futures traded at a premium of 1.35 points at 164.10 compared with spot closing of 162.75. The number of contracts traded were 23,864.

ICICI Bank July 2016 futures traded at a premium of 1.15 points at 262.10 compared with spot closing of 260.95. The number of contracts traded were 17,715.

Indiabulls Real Estate July 2016 futures traded at a premium of 0.10 points at 91.65 compared with spot closing of 91.55. The number of contracts traded were 15,818.  

DLF July 2016 futures traded at a premium of 1.10 points at 157.55 compared with spot closing of 156.45. The number of contracts traded were 12,441.

Among Nifty calls, 8600 SP from the July month expiry was the most active call with an addition of 0.39 million open interests. Among Nifty puts, 8500 SP from the July month expiry was the most active put with a contraction of 0.06 million open interests. The maximum OI outstanding for Calls was at 8600 SP (5.17 mn) and that for Puts was at 8400 SP (5.13 mn). The respective Support and Resistance levels of Nifty are: Resistance 8548.65 --- Pivot Point 8521.10 --- Support --- 8491.95. 

The Nifty Put Call Ratio (PCR) finally stood at 1.15 for July month contract. The top five scrips with highest PCR on OI were HDFC (1.37), Vedanta (1.20), Hero MotoCorp (1.12), Maruti Suzuki India (1.08) and Godrej Consumer Products (1.04). 

Among most active underlying Vedanta witnessed a contraction of 0.10 million of Open Interest in the July month futures contract, followed Tata Steel witnessing a contraction of 0.52 million of Open Interest in the July month contract; State Bank of India witnessed a contraction of 1.04 million of Open Interest in the July month contract, Indiabulls Real Estate witnessed an addition of 5.12 million of Open Interest in the July month contract and ICICI Bank witnessed a contraction of 0.87 million units of Open Interest in the July month's future contract.