Nifty ends flat on profit booking in second half

Erasing all its initial gains, The Indian benchmark -- Nifty -- ended on quiet note on Friday. Profit booking which took place in second half of session mainly dragged the market tad below its neutral lines. Earlier, market made a positive opening and traded in tight band in morning deals as sentiments got some boost with Moody’s Investors Service retained India’s growth forecast at 7.5% for 2016 and revised upwards estimates for China to 6.6% citing strong fiscal and monetary support. Some support also came with the Additional Commissioner, Ministry of Finance, K. Balamurugan’s statement that the Goods and Services Tax is one of the biggest tax reforms since Independence. The GST will not have any problem for those who are paying tax sincerely but it will affect those who are not paying properly.

However, market entered into negative terrain in second half, on account of selling in IT, auto, telecom and realty stocks amid mixed global cues. The sentiments remain dampened as Indian rupee weakened for the second consecutive session against the US dollar, tracking losses in the Asian currencies markets. Investors remained cautious ahead of the announcement of a new governor for the Reserve Bank of India (RBI).

On global front, European shares were poised to post their biggest weekly loss in two months on back of a weaker dollar and hopes of a production cut, While Most Asian markets drifted lower on Friday as investors turned cautious ahead of a key speech by the Fed chief next week.The top gainers from the F&O segment were The Karnataka Bank, India Cements and Petronet LNG. On the other hand, the top losers were Strides Shasun, Dish TV and Container Corporation of India. In the index options segment, maximum OI was being seen in the 8600-9000 calls and 8000-8700 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 0.09% and reached 14.53. The 50-share Nifty was down by 6.35 points or 0.07% to settle at 8,666.90

Nifty August 2016 futures closed at 8677.25 on Friday at a premium of 10.35 points over spot closing of 8,666.90, while Nifty September 2016 futures ended at 8727.10 at a premium of 60.20 points over spot closing. Nifty August futures saw contraction of 0.63 million (mn) units, taking the total outstanding open interest (OI) to 23.21 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 0.15 points at 258.65 compared with spot closing of 258.50. The numbers of contracts traded were 36,654.

ICICI Bank August 2016 futures traded at a premium of 0.25 points at 254.15 compared with spot closing of 253.90. The numbers of contracts traded were 14,681.

Bank of Baroda August 2016 futures traded at a premium of 1.30 points at 162.20 compared with spot closing of 160.90. The numbers of contracts traded were 14,824.

Vedanta August 2016 futures traded at a premium of 0.65 points at 179.60 compared with spot closing of 178.95. The numbers of contracts traded were 11,554.   

Tata Steel August 2016 futures traded at a premium of 2.80 points at 393.75 compared with spot closing of 390.95. The numbers of contracts traded were 19,784.   

Among Nifty calls, 8700 SP from the August month expiry was the most active call with a addition of 0.04 million open interests. Among Nifty puts, 8600 SP from the August month expiry was the most active put with an contraction of 0.53 million open interests. The maximum OI outstanding for Calls was at 8800 SP (7.39 mn) and that for Puts was at 8500 SP (5.95 mn). The respective Support and Resistance levels of Nifty are: Resistance 8693.30--- Pivot Point 8670.20--- Support --- 8643.80.             

The Nifty Put Call Ratio (PCR) finally stood at 1.03 for August month contract. The top five scrips with highest PCR on OI were ICIL (1.75), YESBANK (1.66), JSWSTEEL (1.41), BHARATFORG (1.31) and HINDALCO (1.17).   

Among most active underlying State Bank of India witnessed an contraction of 3.66 million of Open Interest in the August month futures contract, followed Tata Steel witnessing an addition of 0.52 million of Open Interest in the August month contract, Vedanta witnessed a contraction  of 1.02 million of Open Interest in the August month contract, ICICI Bank witnessed an contraction  of 3.74 million of Open Interest in the August month contract and Yes Bank witnessed an contraction  of 0.18 million units of Open Interest in the August month's future contract.