Late hour recovery helps Nifty to end marginally in green

The local benchmark -- Nifty -- witnessed a volatility during the trade on Wednesday and managed to end the session slightly in green, led by a recovery in bank stocks. After a positive opening, Indian market failed to hold their gain and slipped into red terrain, as investors indulged in cutting down their bets on disappointing macroeconomic data and weak trend in Asian markets. India’s industrial output fell by 2.4 percent in July after a spurt in May and June, while Wholesale price inflation soared to a two-year high in August to 3.74 percent driven mainly by a gradual increase in prices in the manufacturing sector. A slowdown in industrial activity does not bode well for Asia's third largest economy, especially after overall growth faltered to a 15-month low between April and June. Investors also remained cautious with the report that India is likely to post its first current account surplus in nine years in the latest quarter, which should bolster the rupee though it is not a good sign for the economy as it reflects weak investment demand at home and subdued exports. Further, market regain momentum, as investors’ sentiments got some comfort with the country’s retail inflation slowing to 5.05 percent in August led by easing food prices especially vegetables and making a strong case for the newly appointed RBI governor Urjit Patel to cut rates in the next monetary policy review on October 4, 2016. Traders also took some encouragement with a report stating that implementation of Goods & Service Tax (GST) will lead to increased tax compliance and attract more foreign direct investments across sectors due to tax transparency and ease of doing business.

On global front, European stocks were trading higher, shrugging off market jitters over central bank uncertainty and a renewed drop in oil prices, while Asian market ended near six-week lows, with Japan's Nikkei falling 0.69 per cent as uncertainty grew ahead of a central bank policy meeting next week.

The top gainers from the F&O segment were PC Jeweller, Reliance Capital and Jain Irrigation Systems. On the other hand, the top losers were Castrol India, Just Dial and BEML. In the index options segment, maximum OI was being seen in the 8700-9000 calls and 8500-8800 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 3.13% and reached 14.76. The 50-share Nifty was up by 11 points or 0.13% to settle at 8,726.60

Nifty September 2016 futures closed at 8768.55 on Wednesday at a premium of 41.95 points over spot closing of 8,726.60, while Nifty October 2016 futures ended at 8806.55 at a premium of 79.95 points over spot closing. Nifty September futures saw contraction of 0.18 million (mn) units, taking the total outstanding open interest (OI) to 32.62 million (mn) units. The near month derivatives contract will expire on September 29, 2016.

From the most active contracts, State Bank of India September 2016 futures traded at a premium of 1.15 points at 258.80 compared with spot closing of 257.65. The numbers of contracts traded were 11,290.

ICICI Bank September 2016 futures traded at a premium of 1.00 points at 272.85 compared with spot closing of 271.85. The numbers of contracts traded were 13,454.

Vedanta Industries September 2016 futures traded at a premium of 0.80 points at 166.45 compared with spot closing of 165.65. The numbers of contracts traded were 10,961.

Axis Bank September 2016 futures traded at a premium of 1.20 points at 604.85 compared with spot closing of 603.65. The numbers of contracts traded were 10,995.   

Tata Motors September 2016 futures traded at a discount of 0.80 points at 563.40 compared with spot closing of 564.20. The numbers of contracts traded were 18,707.   

Among Nifty calls, 8800 SP from the September month expiry was the most active call with a addition of 0.52 million open interests. Among Nifty puts, 8700 SP from the September month expiry was the most active put with an contraction of 0.36 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.88 mn) and that for Puts was at 8500 SP (5.84 mn). The respective Support and Resistance levels of Nifty are: Resistance 8748.00--- Pivot Point 8718.45--- Support --- 8697.05.             

The Nifty Put Call Ratio (PCR) finally stood at 1.18 for September month contract. The top five scrips with highest PCR on OI were MRF (2.67), CASTROLIND (1.16), MARUTI (1.15), GODREJCP (1.14) and BHARTIARTL (1.01).   

Among most active underlying Yes Bank witnessed an contraction of 0.93 million of Open Interest in the September month futures contract, followed Reliance Capital witnessing an addition of 0.28 million of Open Interest in the September month contract, Tata Steel witnessed a addition  of 1.19 million of Open Interest in the September month contract, Tata Motors witnessed an addition  of 2.68 million of Open Interest in the September month contract and Reliance Infrastructure witnessed an contraction  of 0.20 million units of Open Interest in the September month's future contract.