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Equity Futures: Options hint Nifty Bank to face hurdle at 38000 pts

Informist, Monday, Oct 4, 2021

 

By Joe Milton

 

MUMBAI – The Nifty Bank index snapped its four-day losing streak on renewed buying interest in frontline banks, which prompted traders to place bullish bets in the options segment of the index. 

 

Today, the Nifty Bank index closed nearly 1% higher at 37579.65 points, after touching an intraday high of 37670.70 points. Almost all the stocks a part of the index gained, with State Bank of India, Federal Bank, and IndusInd Bank among the top performers. 

 

In the call options segment, maximum addition of open interest was seen at 37600 strike price, and the premium was up 30% as call buyers were active. 

 

However, the highest call bases were at 38000 and 38500 strikes, which are expected to act as hurdles for the index in the October series, said ICICIdirect in its report.  

 

On the back of gains from the heavyweight stocks, the Nifty 50 index gained 0.9% and closed at 17691.25. As the headline index rebounded, it prompted traders to initiate long positions in the October futures of the index on hope of more gains. 

 

Following this, open interest in the October futures of the 50-stock index was up nearly 4% at 12.5 mln. 

 

In the options segment of Nifty 50, maximum addition of open interest was at 17800 strike price call options, which is expected to act as an immediate hurdle. 

 

Analysts do not expect any reversal of trend as long as the 50-stock index holds above 17400 points. 

 

Among stocks, addition of long positions was seen in Deepak Nitrite and Reliance Industries as open interest in the October futures gained 16% and 4%, respectively. 

 

The power outage in China has led to a surge in prices of toluene, phenol, methanol, and acetone, which is expected to benefit the above-mentioned companies.

 

In the spot market, RIL and Deepak Nitrite ended with 1.3% and 8.8% gains respectively. 

 

-–Nifty 50 Oct ended at 17715, up 184.40 points; 23.75-point premium to spot index

-–Nifty 50 Nov ended at 17743.55, up 178.20 points; 52.30-point premium to spot index

-–Nifty 50 Dec ended at 17781.95, up 176.80 points; 90.70-point premium to spot index

 

Total turnover in the futures and options segment of NSE was about 37 trln rupees today compared with 33.6 trln rupees on Friday.  

 

The turnover in index options was about 34 trln rupees compared with 30.8 trln rupees in the previous session. The total premium turnover of index and stock options was 221.7 bln rupees compared with 245.80 bln rupees on Friday. 

 

Tata Steel, Reliance Industries, Tata Power, Indian Railway Catering and Tourism Corp, Divi’s Laboratories, National Aluminium Co, Tata Motors, Adani Enterprises, DLF, Bajaj Finance, and Hindalco Industries were the other most actively traded stocks today. End

 

Edited by Shirsha Thakur

 

Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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Source: Cogencis

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