Weak global cues drag Nifty lower

Pressurized by weak global cues, Nifty ended the session marginally in red on Wednesday. Profit booking which took place in second half of session mainly dragged the market lower. After a cautious start, market manage to hold their gain in late morning session, as sentiment remained up beat with the report that Indirect tax collection rose by about 31 percent during April-June to Rs 1,99,970 crore, from Rs 1,52,740 crore collected in the year-ago period. Some support also came with the private report stating that the strong consumption and public investments have kept India's growth recovery on track this year. According to the report, the present recovery is not accompanied by current account and fiscal excesses or strong core inflationary impulses, unlike previous instances of high growth. However, heavy selling pressure witness in afternoon session and market touched intraday day lows. Sentiment was affected by the discouraging macroeconomic data as wholesale inflation soared to a 23-month high of 3.55 per cent in July, making. Trader also remained wary after influential US Federal Reserve official said interest rates could rise as soon as September. In last leg of trade, market recovered some of its ground and ended the day in red with an 18 point.

On global front, Asian shares ended mostly lower, as sentiment were hit from a lower finish on Wall Street which offset the positive impact of a rise in oil prices. European markets were trading in red with Spanish bonds boosted ahead of a meeting later that could pave the way for a new government in Madrid after eight months of limbo.

The top gainers from the F&O segment were TVS Motor, Steel Authority of India and Motherson Sumi. On the other hand, the top losers were Strides Shasun, Bharat Financial and Jaiprakash Associates. In the index options segment, maximum OI was being seen in the 8600-9000 calls and 8300-8700 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 4.21% and reached 14.78. The 50-share Nifty was down by 18.50 points or 0.21% to settle at 8,624.05

Nifty August 2016 futures closed at 8631.40 on Wednesday at a premium of 7.35 points over spot closing of 8,624.05, while Nifty September 2016 futures ended at 8680.15at a premium of 56.10 points over spot closing. Nifty August futures saw contraction of 0.25 million (mn) units, taking the total outstanding open interest (OI) to 24.58 million (mn) units. The near month derivatives contract will expire on August 25, 2016.

From the most active contracts, State Bank of India August 2016 futures traded at a premium of 1.65 points at 247.05 compared with spot closing of 245.40. The number of contracts traded were 19,842.

ICICI Bank August 2016 futures traded at a premium of 0.75 points at 247.75 compared with spot closing of 247.00. The number of contracts traded were 17,439.

HDFC Bank August 2016 futures traded at a premium of 0.60 points at 1236.35 compared with spot closing of 1,235.75. The number of contracts traded were 9,237.

Sun Pharmaceuticals August 2016 futures traded at a premium of 2.85 points at 787.45 compared with spot closing of 784.60. The number of contracts traded were 10,899.   

Tata Steel August 2016 futures traded at a premium of 0.90 points at 391.90 compared with spot closing of 391.00. The number of contracts traded were 18,760. 

Among Nifty calls, 8700 SP from the August month expiry was the most active call with a addition of 0.48 million open interests. Among Nifty puts, 8500 SP from the August month expiry was the most active put with an contraction of 0.21 million open interests. The maximum OI outstanding for Calls was at 8800 SP (6.60 mn) and that for Puts was at 8500 SP (5.42 mn). The respective Support and Resistance levels of Nifty are: Resistance 8659.57--- Pivot Point 8631.58--- Support --- 8596.07.             

The Nifty Put Call Ratio (PCR) finally stood at 0.92 for August month contract. The top five scrips with highest PCR on OI were ICIL (1.67), BHARATFORG (1.44), YESBANK (1.36), JSWSTEEL (1.16) and EICHERMOT (1.13).   

Among most active underlying State Bank of India witnessed an contraction of 1.27 million of Open Interest in the August month futures contract, followed Tata Steel witnessing an contraction of 0.27 million of Open Interest in the August month contract, ICICI Bank witnessed a addition of 2.84 million of Open Interest in the August month contract, Just Dial witnessed an addition of 1.44 million of Open Interest in the August month contract and Axis Bank witnessed an addition of 0.69 million units of Open Interest in the August month's future contract.