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 flat opening, Indian market strengthened further and traded its 15-month high level in the morning trade. However, market turned flat in second half of the session due to profit-booking at higher levels, ahead of the US Federal Reserve's policy decision later in the day and July F&O expiry on Thursday. Sentiments also remained dampened after the outgoing RBI governor Raghuram Rajan has said that governments should look beyond 'uninformed and motivated' public criticism and protect the independence of their central banks to ensure stable sustainable growth. He also said that the slowdown in credit growth has been largely because of stress in public sector banks stemming from past mistakes in lending and will not be fixed just by a cut in policy rates. Market regained its green terrain on the back of late hour buying as sentiments turned positive with the State Finance Ministers have endorsed the Constitution Amendment Bill for the Goods & Services Tax with some tweaks, giving the NDA government the upper hand in hardball negotiations with the Congress. Traders took some encouragement with NITI Aayog Vice Chairman Arvind Panagariya’s statement that a good monsoon can help add a percentage point to India’s GDP growth in the current fiscal, from 7.6% in 2015-16.

On global front, Asian stocks ended green on Wednesday, with stimulus hopes weakening the yen and triggering a broad rally in Japanese markets, while Chinese shares succumbed to heavy selling pressure after sharp gains in the previous session. European markets were trading with traction in early deals.

Back home, on sectoral front, traders were seen piling position in Banking, Auto and metal counter. HDFC, India's biggest mortgage lender ended 1.37 per cent higher at Rs 1,386.25 after reported 37 per cent jump in its net profit at Rs 1,871 crore for the June quarter. While Bharti Infratel was the top Nifty gainer the stock closed 4.72 per cent higher at Rs 380.55 after the mobile tower company posted a 71 per cent jump in Q1 net profit.

The top gainers from the F&O segment were Jindal Steel & Power, L&T Finance Holdings and Crompton Greaves. On the other hand, the top losers were Dr. Reddy's Laboratories, Dish TV India and Cadila Healthcare. In the index options segment, maximum OI was being seen in the 8400-9000 calls and 7800-8700 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 1.23% and reached 15.42. The 50-share Nifty was up by 25.15 points or 0.29% to settle at 8,615.80

Nifty July 2016 futures closed at 8614.75 on Wednesday at a discount of 1.05 points over spot closing of 8,615.80, while Nifty August 2016 futures ended at 8660.60 at a premium of 44.80 points over spot closing. Nifty July futures saw contraction of 2.75 million (mn) units, taking the total outstanding open interest (OI) to 17.66 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 discount of 0.15 points at 229.25 compared with spot closing of 229.40. The number of contracts traded were 21,034.   

ICICI Bank July 2016 futures traded at a discount of 0.65 points at 269.90 compared with spot closing of 270.55. The number of contracts traded were 23,187.

Tata Steel of July 2016 futures traded at a discount of 7.15 points at 355.55 compared with spot closing of 362.70. The number of contracts traded were 15,857.

Axis Bank July 2016 futures traded at a premium of 1.65 points at 549.70 compared with spot closing of 548.05. The number of contracts traded were 16,208. 

HDFC Bank July 2016 futures traded at a premium of 2.60 points at 1237.00 compared with spot closing of 1,234.40. The number of contracts traded were 28,001. 

Among Nifty calls, 8600 SP from the July month expiry was the most active call with an contraction of 0.01 million open interests. Among Nifty puts, 8600 SP from the July month expiry was the most active put with an addition of 0.78 million open interests. The maximum OI outstanding for Calls was at 8700 SP (6.17 mn) and that for Puts was at 8500 SP (5.32 mn). The respective Support and Resistance levels of Nifty are: Resistance 8663.18--- Pivot Point 8617.62--- Support --- 8570.23.       

The Nifty Put Call Ratio (PCR) finally stood at 1.25 for July month contract. The top five scrips with highest PCR on OI were ULTRACEMCO (1.67), GODREJIND (1.18), HDFC (1.17), CANBK (1.11) and INDUSINDBK (1.11).   

Among most active underlying Yes Bank witnessed an contraction of 1.39 million of Open Interest in the July month futures contract, followed Dr. Reddy's Laboratories witnessing an contraction of 0.21 million of Open Interest in the July month contract; Maruti Suzuki India witnessed a contraction of 0.63 million of Open Interest in the July month contract, State Bank of India witnessed an contraction of 14.79 million of Open Interest in the July month contract and ICICI Bank witnessed an contraction of 9.79 million units of Open Interest in the July month's future contract.