Late hour recovery helps Nifty to end slightly in green

The local benchmark-- Nifty -- witnessed a recovery in last hour of trade and managed to end the session marginally in green. After a positive opening, Indian market turned choppy and traded near its neutral line for most part of the day’s trade. Market turned lower breaching its crucial 8,500 mark in second half of the session, as selling pressure was seen in FMGC space after HUL reported weaker than expected first-quarter earnings. Caution remained in the market with the shares of IT major Wipro edging lower ahead of its first quarter earnings numbers which will be declared later in the day. Also, traders kept a close watch on the monsoon session of Parliament which started on Monday, amid hopes the government will be able to pass the Goods and Services Tax Bill that is now stuck in the Upper House. However, Nifty witnessed smart recovery in dying hour of trade to end with modest gains, supported by Arvind Subramanian’s statement that the Indian economy can grow at more than 8 per cent in the next decade, if global economic environment remains supportive. Some support came in the market global rating agency reaffirming India’s 'BBB-' rating with a stable outlook, while saying it would produce a 7.7 per cent growth rate for FY2017.

On global front, Asian market ended lower on Tuesday as a downturn in crude oil curbed the enthusiasm from fresh record highs on Wall Street. Investors also turned jittery over the report that Asian Development Bank (ADB) cut its 2016 growth projection for developing economies in Asia and the Pacific to 5.6 per cent from earlier forecast of 5.7 per cent. Meanwhile, European stock markets retreated from a three-week high on Tuesday, as disappointing corporate updates soured the investing mood.

The top gainers from the F&O segment were Jaiprakash Associates, Canara Bank and Hindustan Petroleum Corporation. On the other hand, the top losers were MindTree, KPIT Technologies and Mcleod Russel India. In the index options segment, maximum OI was being seen in the 8400-9000 calls and 7800-8600 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 1.20 % and reached 15.78. The 50-share Nifty was up by 19.85 points or 0.23% to settle at 8,528.55.

Nifty July 2016 futures closed at 8540.45 on Tuesday at a premium of 11.90 points over spot closing of 8,528.55, while Nifty August 2016 futures ended at 8577.80 at a premium of 49.25 points over spot closing. Nifty July futures saw addition of 0.51 million (mn) units, taking the total outstanding open interest (OI) to 22.89 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 0.90 points at 230.35 compared with spot closing of 229.45. The number of contracts traded were 20,490.   

Punjab National Bank of July 2016 futures traded at a premium of 0.15 points at 131.10 compared with spot closing of 130.95. The number of contracts traded were 19,191.    

ICICI Bank  July 2016 futures remained flat at 269.25 compared with spot closing. The number of contracts traded were 13,801.             

Bank of Baroda July 2016 futures traded at a premium of 0.75 points at 159.00 compared with spot closing of 158.25. The number of contracts traded were 12,752.   

Tata Motors July 2016 futures traded at a premium of 2.05 points at 500.05 compared with spot closing of 498.00. The number of contracts traded were 12,373.  Among Nifty calls, 8600 SP from the July month expiry was the most active call with an addition of 0.08  million open interests. Among Nifty puts, 8500 SP from the July month expiry was the most active put with an addition of 0.50 million open interests. The maximum OI outstanding for Calls was at 8600 SP (6.12 mn) and that for Puts was at 8400 SP (6.10 mn). The respective Support and Resistance levels of Nifty are: Resistance 8553.50--- Pivot Point 8515.10--- Support --- 8490.15.             

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 (1.31), GRASIM (1.27), MARUTI (1.24), WIPRO (1.23) and JSWSTEEL (1.15).   

Among most active underlying Punjab National Bank witnessed an addition of 7.28 million of Open Interest in the July month futures contract, followed Reliance Industries witnessing an contraction of 0.98 million of Open Interest in the July month contract; State Bank of India  witnessed a contraction of 0.05 million of Open Interest in the July month contract, Tata Motors witnessed an contraction of 0.06 million of Open Interest in the July month contract and Tata Steel witnessed an addition of 1.25 million units of Open Interest in the July month's future contract.