Informist, Wednesday, Jan 31, 2024
By Anshul Choudhary
MUMBAI – Derivatives data show traders expect the Nifty 50 to rise further on Thursday as the index managed to close just below its previous resistance of 21750 points. The next resistance for the index is seen at 22000 points, with open interest in its call options at a high 7.2 mln. However, traders are cautious about profit booking bringing the index down, with 21500 still seen as a major support.
The interest rate decision of the US Federal Open Market Committee later today and announcement of the Indian government’s Interim Budget on Thursday likely led traders to be cautious today, as evident from the high open interest at 21500 puts. Analysts expect trade to be volatile on Thursday in view of the Interim Budget. Finance Minister Nirmala Sitharaman will start her Budget speech at 1100 IST. They expect stock-specific movement in reaction to Budget allocations.
The Nifty 50 today closed over 200 points higher at 21725.70 points, which pushed investors to buy call options at levels above 21700 strike prices, with buying in call options even above 22000. Premium on 21700 call option rose 54 rupees to 136 rupees, that on 21800 rose 42 rupees to 95 rupees. Premiums on call options of 22000 points, which is considered as the next resistance, rose 24 rupees to 44 rupees.
On the put side, premiums fell across strike prices, indicating expectations of positive movement in the index ahead. However, highest open interest remained at 21500 points with over 8 mln active contracts. Premiums at 21700 strike price fell 112 rupees to 126 rupees, that on 21600 fell 100 rupees to 80 rupees, and that on 21500 fell 50 rupees to 50 rupees.
–Nifty 50 Feb closed at 21786.45, up 155.95 points; 60.75-point premium to spot index
–Nifty 50 Mar closed at 21938.55, up 163.60 points; 212.85-point premium to spot index
–Nifty 50 Apr closed at 22060.05, up 148.10 points; 334.3-point premium to spot index
HDFC Bank, Larsen & Toubro, State Bank of India, Tata Motors, and Ambuja Cements were the most-actively traded underlying stocks. End
Edited by Ashish Shirke
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