Nifty ends marginally lower

The local benchmark -- Nifty -- ended the trading day marginally lower on Tuesday, erasing all of its earlier gains. The market remained firm for most part of the session, taking support from better-than-expected inflation data and firm global cues. India’s retail inflation slumped to record low of 2.18 percent in May 2017, as compared to 2.99 percent in April 2017 and 5.76 percent in May 2016, even though there was a marginal spike in fruit rates. Investors’ sentiments also remained optimistic with the union minister Jayant Sinha’s statement that India is poised to become the entrepreneurial engine of the world and lead in innovation and economic development thanks to the factors like its frugal development model and advantage of demographic dividend. Besides, Finance Minister Arun Jaitley said that the Reserve Bank of India (RBI) was at a fairly advanced stage of preparing a list of borrowers from whom non-performing assets (NPAs) of public sector banks could be recovered under the Insolvency and Bankruptcy Code.  However, the index lost the ground in last hour of trade as investors spooked ahead of the two-day US Federal Reserve's rate-setting meet slated to start later in the evening. Some concerns also came with Industrial production growth slipping to 3.1% in April compared to the same period last year, when industrial production grew by 6.5%. Besides, tyre stocks fell down after global rubber body cut 2017 world supply estimates.

Traders were seen piling up positions in Realty, FMCG and Financial Services stocks, while selling was witnessed in IT, Metal and Auto stocks.  The top gainers from the F&O segment were Jaiprakash Associates, GMR Infrastructure and Cholamandalam Investment & Finance Company. On the other hand, the top losers were CEAT, Just Dial and Vedanta. In the index option segment, maximum OI continues to be seen in the 9400-10000 calls and 9000-9700 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 0.72% and reached 11.34. The 50-share Nifty was down by 9.50 points or 0.10% to settle at 9,606.90.

Nifty June 2017 futures closed at 9615.10 on Tuesday at a premium of 8.20 points over spot closing of 9606.90, while Nifty July 2017 futures ended at 9633.00, at a premium of 26.10 points over spot closing. Nifty June futures saw a contraction of 0.03 million (mn) units, taking the total outstanding open interest (OI) to 21.77 million (mn) units. The near month derivatives contract will expire on June 29, 2017.

From the most active contracts, Sun Pharmaceutical Industries June 2017 futures traded at a premium of 0.25 points at 537.75 compared with spot closing of 537.50. The numbers of contracts traded were 16,051.

CEAT June 2017 futures traded at a premium of 9.00 points at 1855.00 compared with spot closing of 1846.00. The numbers of contracts traded were 11,138.

Tata Steel June 2017 futures traded at a premium of 0.80 points at 508.80 compared with spot closing of 508.00. The numbers of contracts traded were 10,972.

Apollo Tyres June 2017 futures traded at a premium of 0.70 points at 255.45 compared with spot closing of 254.75. The numbers of contracts traded were 10,115.

Vedanta June 2017 futures traded at a premium of 1.20 points at 239.50 compared with spot closing of 238.30. The numbers of contracts traded were 10,078.

Among Nifty calls, 9700 SP from the June month expiry was the most active call with an addition of 0.19 million open interests. Among Nifty puts, 9600 SP from the June month expiry was the most active put with a contraction of 0.03 million open interests. The maximum OI outstanding for Calls was at 9700 SP (6.44 mn) and that for Puts was at 9500 SP (7.18 mn). The respective Support and Resistance levels of Nifty are: Resistance 9642.23--- Pivot Point 9618.82--- Support --- 9583.48.

The Nifty Put Call Ratio (PCR) finally stood at 1.12 for June month contract. The top five scrips with highest PCR on OI were Amara Raja Batteries (2.47), Oriental Bank of Commerce (1.85), Kajaria Ceramics (1.25), HDFC Bank (1.23) and Cipla (1.11).

Among most active underlying, Maruti Suzuki India witnessed an addition of 0.03 million units of Open Interest in the June month futures contract, followed by Tata Steel witnessing a contraction of 1.48 million units of Open Interest in the June  month contract, CEAT witnessed an addition of 0.16 million units of Open Interest in the June month contract, Vedanta witnessed an addition of 1.08 million units of Open Interest in the June  month future contract and Housing Development Finance Corporation witnessed an addition of 0.26 million units of Open Interest in the June month future contract.