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Equity Futures: Traders cover short positions as Nifty 50 tops 16200

Informist, Monday, Jul 18, 2022


By Ankika Biswas


MUMBAI – Traders covered their short positions in the futures segment and moved to higher strike-price call options as the Nifty 50 surpassed its hurdle of 16200 points and closed at its highest level in over a month.


The headline index today rose over 1%, as fears eased about a 100-basis-point rate hike by the US Federal Reserve at its meeting later this month. This was after a recent survey showed inflation in the US is expected to cool down in the medium term.


The over 6% fall in open interest of the July futures contract reflected the covering of short positions.


Consequently, traders were active across the 16300-16500 strike price call options, betting on the index to test these levels on managing to sustain the gains. This resulted in a sharp spike in their premiums.


Given that the outlook is positive, analysts expect the index to test 16450-16500 points and recommend using any dips as an opportunity to buy. On the other hand, any fall is seen restricted at 16100 points.


Today, the Nifty 50 closed 1.4% higher at 16278.50 points, after testing a one-month high of 16287.95 points during the day.


Bullish bets were seen in the July futures contract of Hindalco Industries, which closed nearly 5% higher in the spot market and was the top Nifty 50 gainer. Open interest in the contract was up nearly 3%, hinting at build-up of long positions.


Analysts feel the stock can extend its gains to 385-400 rupees going forward. The stock closed at 367.10 rupees.


As for other major Nifty 50 movers, bearish bets were seen in the derivatives segment of HDFC Bank, Dr Reddy’s Laboratories, and Britannia Industries, as their stocks fell 1-2% in the spot market.


–Nifty 50 Jul closed at 16312.95, up 244.65 points; 34.45-point premium to spot index

–Nifty 50 Aug closed at 16325.00, up 243.95 points; 46.50-point premium to spot index

–Nifty 50 Sep closed at 16365.00, up 249.75 points; 86.50-point premium to spot index


Total turnover in the futures and options segment of the National Stock Exchange was about 68.89 trln rupees, higher than 54 trln rupees on Friday.


The turnover in index options was 65.49 trln rupees as against 51.1 trln rupees on Friday. The total premium turnover of index and stock options was at 323.32 bln rupees compared to 305.1 bln rupees on Friday.  


HDFC Bank, Reliance Industries, Axis Bank, Infosys, Tata Consultancy Services, ICICI Bank, Tata Motors, Bharat Electronics, State Bank of India and Hindustan Unilever were the most actively traded underlying stocks.  End


Edited by Ashish Shirke


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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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