Nifty ends flat on profit booking in second half

Erasing all its initial gains, The Indian benchmark -- Nifty -- ended on quiet note on Monday. Profit booking which took place in second half of session mainly dragged the market near its neutral lines. Earlier, market made a gap-up opening and traded jubilantly in morning deals, as sentiments got some boost with the survey of industry body Assocham stating that India Inc expects growth in sales and profitability to pick up by the year-end in sync with an uptick in the big macro picture. Some support also came with the manufacturing sector growth continued its uptrend and hit a four-month high in July, backed by stronger upturn in new business orders. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) rose to 51.8 in July from 51.7 in June.

However, market entered into negative terrain on account of selling in banking space led by over 5% fall in ICICI Bank amid weak June quarter results. ICICI Bank reported a 22 percent year-on-year (YoY) fall in its consolidated net profit at Rs 2515.85 crore in the June quarter, compared with Rs 3232.37 crore in the same period a year ago. Finally, Nifty ended tad below its previous close.

On global front, Asian markets managed to close mostly in green on expectations that the US Fed won’t hike rates after second quarter US GDP data came in lower-than-expected, while, European stocks edged lower in early trade, as investors reacted to European banking stress tests and new Chinese data.

The top gainers from the F&O segment were Bajaj Finance, Voltas and Jindal Steel & Power. On the other hand, the top losers were ICICI Bank, Just Dial and Larsen & Toubro. In the index options segment, maximum OI was being seen in the 8500-9000 calls and 8000-8700 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 1.76% and reached 15.18. The 50-share Nifty was down by 1.95 points or 0.02% to settle at 8,636.55

Nifty August 2016 futures closed at 8682.00 on Monday at a premium of 45.45 points over spot closing of 8,636.55, while Nifty September 2016 futures ended at 8729.45 at a premium of 92.90 points over spot closing. Nifty August futures saw addition of 0.34 million (mn) units, taking the total outstanding open interest (OI) to 22.52 million (mn) units. The near month derivatives contract will expire on August 25, 2016.                                

From the most active contracts, Ashok Leyland August 2016 futures traded at a premium of 0.35 points at 91.85 compared with spot closing of 91.50. The number of contracts traded were 12,429.   

State Bank of India August 2016 futures traded at a discount of 1.20 points at 226.55 compared with spot closing of 227.75. The number of contracts traded were 15,738.   

ICICI Bank of August 2016 futures traded at a premium of 1.05 points at 251.05 compared with spot closing of 250.00. The number of contracts traded were 30,647.      Tata Steel August 2016 futures traded at a premium of 2.10 points at 366.80 compared with spot closing of 364.70. The number of contracts traded were 16,335.   

Axis Bank August 2016 futures traded at a premium of 1.40 points at 552.90 compared with spot closing of 551.50. The number of contracts traded were 10,374. 

Among Nifty calls, 8800 SP from the August month expiry was the most active call with an addition of 0.41 million open interests. Among Nifty puts, 8600 SP from the August month expiry was the most active put with an addition of 0.67 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.58 mn) and that for Puts was at 8500 SP (4.35 mn). The respective Support and Resistance levels of Nifty are: Resistance 8701.73--- Pivot Point 8646.12--- Support --- 8580.93.             

The Nifty Put Call Ratio (PCR) finally stood at 0.87 for August month contract. The top five scrips with highest PCR on OI were EICHERMOT (2.22), SRF (1.51), BAJFINANCE (1.48), UBL (1.31) and TECHM  (1.13).   

Among most active underlying Larsen & Toubro witnessed an addition of 1.56 million of Open Interest in the August month futures contract, followed ICICI Bank witnessing an addition of 7.80 million of Open Interest in the August month contract; Maruti Suzuki India witnessed a addition of 0.09 million of Open Interest in the August month contract, Tata Steel witnessed an addition of 0.68 million of Open Interest in the August month contract and State Bank of India witnessed an addition of 0.71 million units of Open Interest in the August month's future contract.