Informist, Friday, Dec 29, 2023
By Padmini Dhruvaraj
MUMBAI – Investors added fresh short positions between 21600 and 21800 strike prices of put options expiring Thursday, as the Nifty 50 snapped its five-day gaining streak today, on account of profit booking. Meanwhile, call options premiums declined across strike prices.
The 50-stock index opened lower amid mixed cues from the global market and slipped more into the red, dragged by a fall in shares of financial services and oil marketing companies. Eventually, the benchmark index ended 0.2% lower at 21731.40 points.
“Markets had been on a record breaking spree over the last few sessions and hence caution prevailed in today’s session, with investors booking profits selectively in banking, oil and gas and energy stocks, while gains in auto stocks limited the downfall,” Prashanth Tapse, senior vice-president of research at Mehta Equities said in a note.
The 21700 strike price of the put options had the second-highest net change in open interest today with 4.02 mln new positions being added. Premium on the contract was flat at 100 rupees. Additionally, some aggressive put selling was seen at 18300, 20500, and 21000 strike prices.
On the call side, out-of-the-meony strike prices–23000, 22550, 22500, and 22200–had the most open interest additions today. However, premiums across strikes declined, indicating pessimism in the market.
Meanwhile, the January futures contract of the Nifty 50 closed at a premium of 129.65 points to the spot index today. Open interest in the contract rose nearly 4.4% to 13.45 mln, according to provisional data.
Going forward, analysts expect the Nifty 50 profit booking at higher levels to continue. “We may see further consolidation in the index, and it would be healthy after the recent surge,” Ajit Mishra, senior vice-president of technical research at Religare Broking said.
On similar lines, Jay Voara, technical and derivatives analyst at Indiacharts, said long positions by foreign institutional investors are at their peak and expect them to cut down positions next week.
The Nifty 50 is expected to find support at 21500 points and face resistance at 22000 for the next week.
–Nifty 50 Jan closed at 21861.05, down 81.25 points; 129.65-point premium to spot index
–Nifty 50 Feb closed at 21999.95, down 67.25 points; 268.55-point premium to spot index
–Nifty 50 Mar closed at 22135.00, down 42.60 points; 403.60-point premium to spot index
Tata Motors, Indian Railway Catering and Tourism Corp, Indus Towers, Tata Consumer Products, Bharat Heavy Electricals Ltd, Vodafone Idea, and HDFC Bank were among the more actively traded underlying stocks. End
Edited by Aditya Sakorkar
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