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 slightly in green. After making a negative start, Indian market traded choppy near its neutral line for most part of the day’s trade, as sentiments remained subdued after the private report indicated that achieving a 4% inflation target in the near term seems unlikely, largely due to spike in prices of food and non-food items and the August CPI numbers are expected to be in the range of 6.1-6.3 percent. In second half market extended their losses, as market turned cautious ahead of the expiry of the derivative contracts on Thursday and ahead of a widely anticipated speech by the Fed chief at the central bank’s annual meeting in Jackson Hole scheduled on August 26. Recovery in final hour of trade helped market to regain its green terrain and Nifty managed to end with marginal gains.

On global front, European stocks moved higher, with advances in the mining and financial sectors raising the prospect of a second day of gains for the market. Most Asian shares ended modestly higher with volatility at a minimum on few macro catalysts, as investors seem reluctant to place large directional bets ahead of the Jackson Hole address by Fed chair Yellen late this week.

The top gainers from the F&O segment were India Cements, Idea Cellular and Jaiprakash Associates. On the other hand, the top losers were Indo Count Industries, Hindustan Petroleum Corporation and Bharat Heavy Electricals. In the index options segment, maximum OI was being seen in the 8600-9000 calls and 8400-8700 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 2.37% and reached 13.89. The 50-share Nifty was up by 3.45 points or 0.04% to settle at 8,632.60

Nifty August 2016 futures closed at 8641.75 on Tuesday at a premium of 9.15 points over spot closing of 8,632.60, while Nifty September 2016 futures ended at 8695.30 at a premium of 62.70 points over spot closing. Nifty August futures saw contraction of 5.81 million (mn) units, taking the total outstanding open interest (OI) to 12.35 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 0.05 points at 255.35 compared with spot closing of 255.30. The numbers of contracts traded were 27,783.

Bank of Baroda August 2016 futures traded at a premium of 0.65 points at 164.75 compared with spot closing of 164.10. The numbers of contracts traded were 17,665.

HDFC Bank August 2016 futures traded at a premium of 10.70 points at 1263.75 compared with spot closing of 1,253.05. The numbers of contracts traded were 21,334.

Tata Steel August 2016 futures traded at a premium of 1.70 points at 386.00 compared with spot closing of 384.30. The numbers of contracts traded were 16,066.   

Sun Pharmaceuticals August 2016 futures traded at a premium of 1.40 points at 764.60 compared with spot closing of 763.20. The numbers of contracts traded were 16,856.   

Among Nifty calls, 8700 SP from the August month expiry was the most active call with a contraction of 0.04 million open interests. Among Nifty puts, 8600 SP from the August month expiry was the most active put with an addition of 0.10 million open interests. The maximum OI outstanding for Calls was at 8800 SP (6.79 mn) and that for Puts was at 8400 SP (5.77 mn). The respective Support and Resistance levels of Nifty are: Resistance 8656.50 --- Pivot Point 8618.25 --- Support --- 8594.35.             

The Nifty Put Call Ratio (PCR) finally stood at 0.95 for August month contract. The top five scrips with highest PCR on OI were YESBANK (1.64), PCJEWELLER (1.44), BHARATFORG (1.42), JSWSTEEL (1.21) and BRITANNIA (1.11).   

Among most active underlying State Bank of India witnessed an contraction of 23.18 million of Open Interest in the August month futures contract, followed Hindustan Petroleum Corporation witnessing an contraction of 1.36 million of Open Interest in the August month contract, Tata Steel witnessed a contraction  of 3.55 million of Open Interest in the August month contract, HDFC Bank witnessed an contraction  of 9.16 million of Open Interest in the August month contract and Infosys witnessed an contraction  of 4.44 million units of Open Interest in the August month's future contract.