Informist, Tuesday, Oct 31, 2023
By Maitri Seth
MUMBAI – Investors sold call options at 19200-19250 strike prices of the Nifty 50 index today as there were no positive cues on the domestic and global front and on caution ahead of US Federal Reserve’s monetary policy meeting outcome on Wednesday.
Heavy writing was seen in call options of 19200 strike price, with 45% of the total contracts being fresh and short positions, said Ruchit Jain, lead research analyst at 5Paisa. Premium on the 19200 strike price rose 49.7% to 34.55 rupees.
Heavy open interest build-up was also seen in call options of 19250 strike prices of the index, with premiums declining 54.6% to 21.70 rupees.
Analysts see 19200-19250 as crucial resistance for the Nifty 50, which is not seen being breached at least in the next two sessions. The market will likely remain cautious ahead of the Federal Reserve’s monetary policy meeting outcome late on Wednesday.
Among put options, the 19100 contract saw some buying and premium rose 22.5% to 73.10 rupees. Significant change in open interest was also seen at 19000 strike price, as the premium rose 14.5% to 88.50 rupees. Analysts see 19000 points as the next immediate support for the benchmark index.
The Nifty 50 is likely to move in the range of 19000-19250 points in the next session. Today, the benchmark index ended 0.3% lower at 19079.60 points. Today the selling was dominated by foreign institutional investors, said Jain.
Investors are following the “sell-on-rise” strategy, said analysts.
Market participants said there are no major triggers on both global and domestic front, with no major surprises from the ongoing earnings season. However, a significant directional move is likely after the US Fed announces its stance on interest rate hikes.
Analysts believe that banking stocks might remain weak in the next session, and select information technology stocks such as HCLTech and Persistent Systems appear “good on the technical front”.
The November futures contract of the Nifty 50 today closed at a premium of 85.40 points to the spot index. Open interest in the contract rose 4.6% to 11.41 mln, according to provisional data.
–Nifty 50 Nov closed at 19165, down 55.90 points; 85.40-point premium to spot index
–Nifty 50 Dec closed at 19265.05, down 61 points; 185.45-point premium to spot index
–Nifty 50 Jan closed at 19366.25, down 62.95 points; 286.65-point premium to spot index
HDFC Bank, ICICI Bank, Reliance Industries, State Bank of India, Larsen & Toubro, and Canara Bank were among the most actively traded underlying stocks. End
Edited by Ashish Shirke
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