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Equity Futures: Put writers shift lower as Nifty 50 falls below 16000

Informist, Wednesday, Jul 13, 2022

 

By Joe Milton

 

MUMBAI – The Nifty 50 index ended below 16000 due to caution among investors ahead of US retail inflation data later today, which prompted put option sellers to shift to lower strike prices. 

 

Today, the Nifty 50 index stayed below 16000 points, which led traders to unwind positions at this strike price in the put options contracts expiring on Thursday, and shift lower to the 15800 and 15500 strike prices.

 

But option sellers stayed intact in monthly put options at the 16000 strike price expiring on Jul 28. 

 

The 50-stock index closed 0.6% lower at 15966.65 points after touching the day’s high and low of 16140 and 15950.15 points, respectively. 

 

In case of a gap-down opening on Tuesday due to weak global cues, analysts expect the Nifty 50 index to find support at 15800 points. 

 

Market participants widely expect retail inflation in the US to have peaked at 8.8% in June compared to a year ago, the highest since 1981. 

 

The Nifty 50 may not give any directional move, and may continue to consolidate between 15900 and 16200 points, said Ratnesh Goyal, senior technical and derivative analyst at Arihant Capital Markets. 

 

Open interest in the July futures of the headline index surged about 6% to about 13 mln, indicating the addition of short positions. 

 

In terms od specific stocks, shares of IndusInd Bank plunged about 7% intraday due to speculation of an investigation by the Enforcement Directorate regarding remittance transactions. The sharp fall triggered the addition of short positions in the July futures of the stock, as open interest in the contract jumped 22% to 20.2 mln. 

 

However, the stock came sharply off lows after clarification from the bank that the investigation pertained to transactions during 2011-2014, and it had no credit exposure to the entities involved.  

 

In the options segment of IndusInd Bank, the highest open interest in the call and put segments was at the 900- and 800-rupee strikes, respectively. 

 

On the technical front, the stock remains weak and aggressive traders can initiate long positions with a stop-loss of 750 rupees, said Goyal. Today, the stock ended 3.3% lower at 819.05 rupees. 

 

–Nifty 50 Jul closed at 15990.90, down 53.35 points; 24.25-point premium to spot index

–Nifty 50 Aug closed at 16008.20, down 56.65 points; 41.55-point premium to spot index

–Nifty 50 Sep closed at 16058.00, down 53.15 points; 91.35-point premium to spot index

 

The total turnover in the futures and options segment of the National Stock Exchange stood at about 108.4 trln rupees, compared to 78 trln rupees on Tuesday.

 

The turnover in the index options was at 105.9 trln rupees against 75.6 trln rupees in the previous session. The total premium turnover of index and stock options was at 387.9 bln rupees, compared to 326.9 bln rupees on Tuesday.  

 

IndusInd Bank, Tata Consultancy Services, Reliance Industries, Bajaj Finance, Bharti Airtel, ICICI Bank, Adani Enterprises, HDFC Bank, Infosys, Axis Bank, and HCL Technologies were the most actively traded underlying stocks today.  End

 

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

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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