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Wednesday, September 28, 2022

Equity Futures: Nifty 50 slips below 16100 triggering bearish bets

Informist, Tuesday, Jul 12, 2022


By Joe Milton


MUMBAI – The Nifty 50 index fell below 16100 points today, tracking the weakness in the global markets due to the resurgence of COVID-19 in China and on concerns over economic growth. This prompted put option sellers to unwind their positions at this strike price. 


Caution amid Apr-Jun earnings and retail inflation data from India later today and the US on Wednesday kept investors on the sidelines. 


Intense selling in the last hour of trade pulled the Nifty 50 index sharply below 16100 points which led to the unwinding of positions at this put option strike price expiring on Thursday. 


But unwinding was not spotted at the 16100 strike price in the monthly put option contracts expiring on Jul 28. 


Consequently, a significant amount of open interest was added at the 16100 strike price in the call option segment expiring on Thursday. The highest open interest in the segment was at 16200 strike price. 


The Nifty 50 index may find immediate support at 16000 points, but if weakness persists then it may fall to 15850 points level, said Rajesh Bhosale, technical and derivative analyst at Angel One. 


In fact, the highest open interest in the put options of Nifty 50 expiring on Thursday was at 16000 strike price. 


As the headline index continues to witness selling pressure at higher levels, Chandan Taparia, vice president at Motilal Oswal Financial Services advised that “any rise towards 16161 points can be utilised as a selling opportunity in the index.” 


Open interest in the July futures of Nifty 50 surged 6.5% to 12.6 mln hinting addition of short positions.


In the spot market, the 50-stock index closed about 1% lower at 16058.30 points after touching an intraday high and low of 16158.75 and 16031.15 points, respectively. 


Today, the Nifty Bank index snapped its four-day gaining streak and closed 1% lower at 35132.25 points due to profit booking in frontline bank stocks. 


The highest open interest in the call and put option segments of Nifty Bank expiring on Thursday was at 35500 and 35000 strike prices, respectively.


Analysts expect the index to remain in this range, while the next leg of the up move is expected only if the index decisively closes above 36000 points. 


–Nifty 50 Jul closed at 16030.00, down 173.50 points; 28.30-point discount to spot index

–Nifty 50 Aug closed at 16056.60, down 162.10 points; 1.70-point discount to spot index

–Nifty 50 Sep closed at 16095.00, down 167.95 points; 36.70-point premium to spot index


The total turnover in the futures and options segment of the National Stock Exchange stood at about 78 trln rupees compared to 65 trln rupees on Monday.


The turnover in the index options was at 75.6 trln rupees against 62 trln rupees in the previous session. The total premium turnover of index and stock options was at 326.9 bln rupees compared to 321.8 bln rupees on Monday.  


Tata Consultancy Services, Reliance Industries, Bajaj Finance, ICICI Bank, Adani Enterprises, HDFC Bank, Infosys, Axis Bank, HCL Technologies, Adani Ports and Special Economic Zone, and State Bank of India were the most actively traded underlying stocks today. End


Edited by Maheswaran Parameswaran


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Cogencis news is now Informist news. 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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