Nifty end marginally in green ahead of August F&O expiry

The local benchmark -- Nifty -- traded in green throughout the day and ended higher with a gain of two tenth of a percent on Wednesday. After a positive opening, market hold on to its gains and traded mostly in green throughout the session, as sentiment remained upbeat with rating agency Ind-Ra revising India's economic growth forecast to 7.8 percent for the ongoing fiscal on better monsoon. It has said the positive impact of monsoon on agriculture will support the overall GDP growth with its backward and forward linkages. Beside, Prime Minister Narendra Modi stated that India’s progress is incomplete without rapid expansion and up-gradation of basic infrastructure, while underlining that his government’s efforts are characterized by speed and scale to usher in an era of historic growth. Markets pared all of their gains and entered into red terrain couple of times as traders opted to remain of sidelines ahead of Futures & Options (F&O) segment from the near month i.e. August 2016 series. However, recovery in last leg of trade helped markets to regain green terrain as market participants went for bargain hunting. 

Firm opening in European market too supported local benchmark, European stocks were mostly higher, as investors pulled 5.7 billion pound out of UK-based stock market funds, preferring to put their cash into safe havens due to concerns over Britain’s vote to leave the EU. Meanwhile, Asian shares ended mostly lower, ahead of Federal Reserve Chairwoman Janet Yellen’s speech later this week, which could provide hints about the timing of further hike in interest rates.

The top gainers from the F&O segment were Engineers India, Aurobindo Pharma and Torrent Pharmaceuticals. On the other hand, the top losers were Idea Cellular, Lupin and Ambuja Cements. 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 contraction by 2.95% and reached 13.48. The 50-share Nifty was up by 17.70 points or 0.21% to settle at 8,650.30

 Nifty August 2016 futures closed at 8654.65 on Wednesday at a premium of 4.35 points over spot closing of 8,650.30, while Nifty September 2016 futures ended at 8702.75 at a premium of 52.45 points over spot closing. Nifty August futures saw contraction of 3.05 million (mn) units, taking the total outstanding open interest (OI) to 9.29 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 0.65 points at 254.80 compared with spot closing of 254.15. The numbers of contracts traded were 16,750.

Sun Pharmaceuticals August 2016 futures traded at a premium of 0.30 points at 771.25 compared with spot closing of 770.95. The numbers of contracts traded were 15,599.

Reliance Industries August 2016 futures traded at a discount of 0.75 points at 1020.50 compared with spot closing of 1,021.25. The numbers of contracts traded were 15,654.

HDFC Bank August 2016 futures traded at a discount of 0.85 points at 1261.40 compared with spot closing of 1,262.25. The numbers of contracts traded were 23,442.   

Infosys August 2016 futures traded at a premium of 1.95 points at 1057.10 compared with spot closing of 1,055.15. The numbers of contracts traded were 15,310.   

Among Nifty calls, 8700 SP from the August month expiry was the most active call with a contraction of 0.25 million open interests. Among Nifty puts, 8600 SP from the August month expiry was the most active put with an addition of 0.40 million open interests. The maximum OI outstanding for Calls was at 8800 SP (6.63 mn) and that for Puts was at 8400 SP (6.02 mn). The respective Support and Resistance levels of Nifty are: Resistance 8667.27--- Pivot Point 8644.08--- Support --- 8627.12.             

The Nifty Put Call Ratio (PCR) finally stood at 1.04 for August month contract. The top five scrips with highest PCR on OI were PCJEWELLER (1.66), YESBANK (1.64), TORNTPHARM (1.54), BHARATFORG (1.35) and DIVISLAB (1.33).   

Among most active underlying State Bank of India witnessed an contraction of 8.72 million of Open Interest in the August month futures contract, followed Maruti Suzuki India witnessing an contraction of 0.37 million of Open Interest in the August month contract, Aurobindo Pharma witnessed a contraction  of 3.47 million of Open Interest in the August month contract, HDFC Bank witnessed an contraction  of 6.42 million of Open Interest in the August month contract and Hindustan Petroleum witnessed an contraction  of 2.54 million units of Open Interest in the August month's future contract.