Nifty ends flat ahead of US Fed policy outcome

Erasing all of its intraday gains, Indian benchmark -- Nifty -- ended the Wednesday’s trade unchanged, as traders remained on sidelines ahead of US Federal Reserve interest rate decision which is due later in the day. Earlier, market started in green and gained momentum with global rating agency Moody’s statement that it could upgrade India’s rating in 1-2 years if it is convinced that reforms are tangible, though it has called the reform process slow and gradual with muted private investment and NPAs posing a challenge. It said that it has a positive outlook on India. Meanwhile, the Union Cabinet has officially ended the practice of putting up a separate Railway Budget, which started in 1924, by merging it with the General Budget. The Cabinet also cleared finance ministry’s proposals to reform the entire budgetary process, including advancing the date of budget presentation and dropping the plan and non-plan distinction. However, market took U-turn and entered into red terrain in second half of trade, as traders opted to book intraday profits at higher levels. Weakness in Indian currency too dampened sentiments. Indian rupee depreciated by 4 paise to trade at 67.06 against the US dollar at the time of equity markets closing, due to fresh buying of the American currency by banks and importers.

On global front, European stocks rallied after the Bank of Japan announced new monetary policy measures and as investors awaited the outcome of the US Federal Reserve’s meeting, while Asian markets ended mostly higher with Japanese stocks rallied and the yen weakened in a volatile session after the Bank of Japan decided to adopt a target for long-term interest rates in an overhaul of its massive stimulus program.

The top gainers from the F&O segment were Indo Count Industries, Bharti Infratel and Eicher Motors. On the other hand, the top losers were Jain Irrigation Systems, Wockhardt and Indiabulls Real Estate. 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 addition by 0.17% and reached 14.80. The 50-share Nifty was down by 1.25 points or 0.01% to settle at 8,777.15

 Nifty September 2016 futures closed at 8806.95 on Wednesday at a premium of 29.80 points over spot closing of 8,777.15, while Nifty October 2016 futures ended at 8847.75 at a premium of 70.60 points over spot closing. Nifty September futures saw contraction of 0.13 million (mn) units, taking the total outstanding open interest (OI) to 32.42 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 0.80 points at 252.30 compared with spot closing of 251.50. The numbers of contracts traded were 11,358.

ICICI Bank September 2016 futures traded at a premium of 0.40 points at 270.40 compared with spot closing of 270.00. The numbers of contracts traded were 11,311.

Hindalco Industries September 2016 futures traded at a premium of 0.40 points at 149.65 compared with spot closing of 149.25. The numbers of contracts traded were 8,586.

Axis Bank September 2016 futures traded at a premium of 0.90 points at 599.90 compared with spot closing of 599.00. The numbers of contracts traded were 9,172.   

Tata Motors September 2016 futures traded at a premium of 0.35 points at 550.90 compared with spot closing of 550.55. The numbers of contracts traded were 11,346.   

Among Nifty calls, 8900 SP from the September month expiry was the most active call with a addition of 0.41 million open interests. Among Nifty puts, 8800 SP from the September month expiry was the most active put with an addition of 0.11 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.32 mn) and that for Puts was at 8500 SP (6.68 mn). The respective Support and Resistance levels of Nifty are: Resistance 8816.90--- Pivot Point 8787.10--- Support --- 8747.35.             

The Nifty Put Call Ratio (PCR) finally stood at 1.27 for September month contract. The top five scrips with highest PCR on OI were EICHERMOT (2.35), MRF (2.33), GODREJCP (1.18), GRASIM  (1.16) and MARUTI (1.16).   

Among most active underlying Yes Bank witnessed an contraction of 1.00 million of Open Interest in the September month futures contract, followed Maruti Suzuki India witnessing an contraction of 0.02 million of Open Interest in the September month contract, Tata Motors witnessed a contraction  of 1.33 million of Open Interest in the September month contract, SBI witnessed an addition  of 2.06 million of Open Interest in the September month contract and Tata Steel witnessed an addition  of 0.54 million units of Open Interest in the September month's future contract.