Informist, Tuesday, Mar 28, 2023
By Padmini Dhruvaraj
MUMBAI – Indecisiveness prevailed among investors a day before the monthly expiry of derivatives due to an absence of any triggers in the market, analysts said.
On the call options front, the open interest at the 17000 strike price rose the most. However, the premium at the level fell by 55% to 42.90 rupees ahead of the expiry as the Nifty 50 ended 0.2% lower at 16951.70 points.
While put options’ investors squared off their positions at the 17000 strike price, some aggressive put options selling was seen at levels between 16600-16900 points, indicating that the expiry will likely be above 16900-17000 points.
A similar trend was seen on the call options chain, where aggressive selling was seen in contracts with strike prices above 17000 points, indicating that the Nifty 50 will likely not close above 17000 points on Wednesday.
Technical analysts also expect the Nifty 50’s March contract to expire to be between 16800-17000 points. “Foreign institutional investors are already short in the derivative markets, so no new short positions are expected to be added on Wednesday,” said Ratnesh Goyal, senior technical and derivative analyst at Arihant Capital Markets. As a result, there might not be much action in the derivatives market on Wednesday, he added.
The April contracts, too, had a similar indecisive trend where open interest was the highest at the 17000 strike price in both put and call options. Even as the premiums of both contracts remained higher, the change in their premiums was nearly flat.
The Nifty has been stuck between the tight range of 16800 and 17200 in the last few sessions and would desperately need a decisive breach on either side to see a directional move, analysts said.
“Market participants have been trying to defend 16900 in Nifty 50 for the last three sessions and its breakdown may trigger a sharp reaction on the downside,” said Ajit Mishra, vice president of technical research at Religare Broking.
On the futures front, the March futures contract of the Nifty 50 closed at a premium of 26 points to the spot index today. Open interest was 6.8% higher at 10.13 mln, as per provisional data.
–Nifty 50 Mar closed at 16977.70, down 59.70 points; 26-point premium to spot index
–Nifty 50 Apr closed at 17084.70, down 29.40 points; 133-point premium to spot index
–Nifty 50 May closed at 17146, down 33.05 points; 194.30-point premium to spot index
The total turnover in the futures and options segment of the National Stock Exchange was 245.96 trln rupees today, as against 181.72 trln rupees on Monday.
The turnover in index options was 242.21 trln rupees, compared with 177.27 trln rupees in the previous session. The total premium turnover of index and stock options was 574.84 bln rupees, compared with 662.25 bln rupees on Monday.
Adani Enterprises, Reliance Industries, HDFC Bank, State Bank of India, and Adani Ports and Special Economic Zone were among the most actively traded underlying stocks.
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Vidhi Verma
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