Nifty gives up gains to end flat with negative bias

Indian equity benchmark -- Nifty -- surrendered all its gains to close flat with a negative bias on Thursday, with softness in oil prices creating a sense of caution in the market. The index zoomed over 65 points to 9,698.85, driven by a slew of market-friendly measures taken by regulator Securities and Exchange Board of India (SEBI). SEBI eased rules on the restructuring of distressed companies, making it easier for banks to sell them off. Markets regulator SEBI also decided to ease the entry rules for foreign portfolio investors (FPI) willing to invest directly in Indian markets rather than via P-Notes or offshore derivative instruments (ODIs). Sentiments also remained upbeat as NCAER revised upward the gross domestic product (GDP) growth for the current financial year to 7.6 percent from 7.3 percent projected earlier. It also scaled up the country's gross value added (GVA) growth from 7 percent to 7.3 percent for the year. However, the markets gave up early gains, tracking weak cues from European markets along with profit booking in recent outperformers. Some concerns also came with the report that SEBI approved a proposal to tighten rules for participatory notes through imposition of a regulatory fee on issuers of such instruments. Besides, foreign portfolio investors (FPIs) have been net sellers of Indian equities, ending with net sell position for the 9th straight day on Wednesday.

Traders were seen piling up positions in PSU, Pharma and Financial Services stocks, while selling was witnessed in Realty, Metal and IT stocks. The top gainers from the F&O segment were Jaiprakash Associates, Reliance Defence & Engineering and Godfrey Phillips India. On the other hand, the top losers were Indiabulls Real Estate, Just Dial and Wockhardt. In the index option segment, maximum OI continues to be seen in the 9500-10000 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 increased by 2.68% and reached 11.20. The 50-share Nifty was down by 3.60 points or 0.04% to settle at 9,630.00.

Nifty June 2017 futures closed at 9633.10 on Thursday at a premium of 3.10 points over spot closing of 9630.00, while Nifty July 2017 futures ended at 9652.15, at a premium of 22.15 points over spot closing. Nifty June futures saw a contraction of 0.63 million (mn) units, taking the total outstanding open interest (OI) to 20.37 million (mn) units. The near month derivatives contract will expire on June 29, 2017.

From the most active contracts, Infosys June 2017 futures traded at a premium of 3.10 points at 942.10 compared with spot closing of 939.00. The numbers of contracts traded were 26,386.

Yes Bank June 2017 futures traded at a premium of 1.35 points at 1452.30 compared with spot closing of 1450.95. The numbers of contracts traded were 18,722.

DLF June 2017 futures traded at a premium of 1.15 points at 196.15 compared with spot closing of 195.00. The numbers of contracts traded were 17,446.

State Bank of India June 2017 futures traded at a premium of 0.75 points at 294.45 compared with spot closing of 293.70. The numbers of contracts traded were 17,192.

Reliance Industries June 2017 futures traded at a discount of 1.25 points at 1433.55 compared with spot closing of 1434.80. The numbers of contracts traded were 16,823.

Among Nifty calls, 9700 SP from the June month expiry was the most active call with an addition of 0.22 million open interests. Among Nifty puts, 9600 SP from the June month expiry was the most active put with a contraction of 1.10 million open interests. The maximum OI outstanding for Calls was at 9700 SP (6.95 mn) and that for Puts was at 9500 SP (5.53 mn). The respective Support and Resistance levels of Nifty are: Resistance 9679.98--- Pivot Point 9648.87--- Support --- 9598.88.

The Nifty Put Call Ratio (PCR) finally stood at 1 for June month contract. The top five scrips with highest PCR on OI were Amara Raja Batteries (2), Oriental Bank of Commerce (2), HDFC Bank (1), KPIT Technologies (1) and Cipla (1).

Among most active underlying, Reliance Industries witnessed a contraction of 0.66 million units of Open Interest in the June month futures contract, followed by DLF witnessing an addition of 2.72 million units of Open Interest in the June  month contract, State Bank of India witnessed a contraction of 3.41 million units of Open Interest in the June month contract, Infosys witnessed a contraction of 3.72 million units of Open Interest in the June  month future contract and Maruti Suzuki India witnessed a contraction of 0.07 million units of Open Interest in the June month future contract.