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Equity Futures:Nifty 50 may continue to face resistance at 16000 pts

Informist, Wednesday, Jul 6, 2022


By Vaibhavi


NEW DELHI – The Nifty 50 ended over 1% higher today amid sustained buying across frontline stocks. Sharp gains across consumer goods, automobile, and financial stocks helped the Nifty 50 briefly cross its crucial hurdle of 16000 points. 


Though the index couldn’t sustain above 16000 points, buying across most frontline stocks helped it trade above 15800 points throughout the session. This prompted traders to unwind positions across the 15800-16150 strike price call options. 


Despite the unwinding at those levels, the Nifty 50 is likely to face strong resistance in the 16000-16150-point zone, said Ratnesh Goyal, senior technical and derivatives analyst at Arihant Capital Markets. 


Though profit booking after the strong upmove cannot be ruled out, downside for the headline index is likely to be restricted at 15600-15800 points, Goyal said.


The highest concentration of positions was at the 15800 strike price put option, indicating strong support at that level.


A jump of nearly 8% in open interest in the Nifty 50’s July futures contract also hinted at addition of some long positions. 


Today, the Nifty 50 ended at 15989.80 points, up 1.1%, after hitting a high of 16011.35 points.


Meanwhile, as a fall in crude prices lifted sentiment for several sectors due to hope of easing pressures on profitability, it dented the outlook for upstream oil companies. Concerns of profitability taking a hit due to the sharp decline in oil prices pulled shares of Oil and Natural Gas down over 7% intraday.  


Briefly, the stock even slipped below its crucial support of 120 rupees to hit a near 10-month low of 119.85 rupees. Despite the weak trend for the stock, positions were intact at the 120-rupee strike price put option, as investors hope the stock will hold above that level.


In case of a decisive fall below 120 rupees, analysts expect further weakness to creep into the stock and pull it towards 110 rupees. Today, it ended over 5% lower at 120.95 rupees.


Broad-based gains across automobile and consumer goods stocks, as a fall in commodity prices eased concerns over profitability, triggered bullish bets in those counters.


Traders aggressively added positions across Britannia Industries, Godrej Consumer Products, Eicher Motors, Hero MotoCorp, Nestle India, Mahindra & Mahindra, Maruti Suzuki and Marico, among others, sharply lifting open interest across their July futures contracts. 


Today, the Nifty Auto and Nifty FMCG indices ended 2.6% higher each.


–Nifty 50 Jul closed at 16018.45, up 242.40 points; 28.65-point premium to spot index

–Nifty 50 Aug closed at 16032.65, up 228.80 points; 42.85-point premium to spot index

–Nifty 50 Sep closed at 16075.10, up 229.15 points; 85.30-point premium to spot index


The total turnover in the futures and options segment of the National Stock Exchange surged to nearly 128 trln rupees today from 92 trln rupees on Tuesday. 


At 125.41 trln rupees, the turnover in index options was higher than 90.00 trln rupees in the previous session. The total premium turnover of index and stock options was higher at 455.10 bln rupees, compared with 398.00 bln rupees on Tuesday.  


Reliance Industries, ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Maruti Suzuki, Hindustan Unilever, Bajaj Finance, Tata Consultancy Services, Infosys and Tata Steel were the most actively traded underlying stocks today.  End


Edited by Avishek Dutta


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Source: Cogencis

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