Nifty snapped two days of gains; ended lower

The local benchmark -- Nifty -- snapped two day gains to end near intraday low levels, as cautions prevailed in the market ahead of corporate results. After a positive opening, market soon turned flat and traded choppy for most part of the day’s trade. But, index extended losses in second half and continued its trade in negative to end near intraday lows, as investors opted to remain on sidelines awaiting progress on the tax reforms bill. Sentiments also remained under pressure with the Moody's Investors Service’s report indicating the growth in debt levels over the decade-mainly driven by private debts, making emerging market economies vulnerable to external shocks. Traders failed to get any comfort with government’s hope on support from regional parties that the Rajya Sabha will clear the indirect tax reform in the first week of August. Further, Investors shrugged off report that the country’s foreign direct investment (FDI) got a big push by the launch of Make in India programme in September 2014 and surged up by 46 per cent during October 2014 and May this year.

On global front, Asian markets ended mostly higher on Thursday as expectations for a stimulus package lifted Japanese shares and better-than-anticipated corporate earnings in the U.S. eased concerns over global growth. While European markets made a weak start to dampened market sentiments. Back home, traders continued to sell their stocks in banking space after earnings from HDFC Bank and Kotak Mahindra Bank raised some concerns about bad loans in the sector. HDFC Bank fell 0.3%, while Kotak Mahindra Bank was down by 2.71%.

The top gainers from the F&O segment were Engineers India, ACC and Hindustan Petroleum Corporation. On the other hand, the top losers were Punjab National Bank, JSW Energy and Wockhardt. 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 1.74% and reached 15.71. The 50-share Nifty was up by 55.75 points or 0.65% to settle at 8,510.10.

Nifty July 2016 futures closed at 8519.75 on Wednesday at a premium of 9.65 points over spot closing of 8,510.10, while Nifty August 2016 futures ended at 8559.45 at a premium of 49.35 points over spot closing. Nifty July futures saw contraction of 0.39 million (mn) units, taking the total outstanding open interest (OI) to 23.12 million (mn) units. The near month derivatives contract will expire on July 28, 2016.                                

From the most active contracts, Ashok Leyland July 2016 futures traded at a discount of 0.15 points at 97.20 compared with spot closing of 97.35. The number of contracts traded were 22,322.   

State Bank of India July 2016 futures traded at a premium of 1.00 points at 225.80 compared with spot closing of 224.80. The number of contracts traded were 16,450.   

ICICI Bank of July 2016 futures traded at a premium of 0.62 points at 262.60 compared with spot closing of 262.00. The number of contracts traded were 12,122.       HDFC Bank July 2016 futures traded at a premium of 2.80 points at 1233.10 compared with spot closing of 1,230.30. The number of contracts traded were 16,206.   

Axis Bank July 2016 futures traded at a premium of 2.35 points at 539.30 compared with spot closing of 536.95. The number of contracts traded were 17,862. 

Among Nifty calls, 8600 SP from the July month expiry was the most active call with an addition of 0.48  million open interests. Among Nifty puts, 8500 SP from the July month expiry was the most active put with an contraction of 0.81 million open interests. The maximum OI outstanding for Calls was at 8600 SP (6.42 mn) and that for Puts was at 8400 SP (5.63 mn). The respective Support and Resistance levels of Nifty are: Resistance 8562.42--- Pivot Point 8532.93--- Support --- 8480.62.             

The Nifty Put Call Ratio (PCR) finally stood at 1.09 for July month contract. The top five scrips with highest PCR on OI were ULTRACEMCO (1.57), WIPRO (1.36), HEROMOTOCO (1.26), HDFC (1.18) and MARUTI (1.16).   

Among most active underlying Wockhardt  witnessed an contraction of 0.44 million of Open Interest in the July month futures contract, followed Ashok Leyland witnessing an contraction of 1.36 million of Open Interest in the July month contract; State Bank of India  witnessed a contraction of 0.98 million of Open Interest in the July month contract, Axis Bank witnessed an contraction of 0.01 million of Open Interest in the July month contract and Hindustan Petroleum Corporation witnessed an addition of 0.26 million units of Open Interest in the July month's future contract.