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Equity Futures: Nifty 50 hits 17400, but upside seen limited hereon

Informist, Wednesday, Aug 3, 2022


By Joe Milton


MUMBAI – The Nifty 50 bounced back in the last hour of trading and touched 17400 points today, but analysts say the upside for the index could be limited.


The 50-stock index fell in early trade and touched an intraday low of 17225.85 points due to profit booking. However, it bounced back in the final hour amid strong buying in the shares of Reliance Industries and a few information technology companies.


Gains in the indices are getting concentrated to fewer stocks which usually happens in the last leg of an upward trend, said Ruchit Jain, lead research analyst at 5paisa.com. 


“Traders need to be very specific in the stock selection for trading and look to lighten up longs in the up move from hereon,” Jain said. 


The headline index ended 0.3% higher at 17388.15 points and managed to briefly surpass 17400 points. 


As a result, call option sellers unwound their positions at the 17300 strike price. In the call options segment expiring on Thursday, the highest open interest was at the 17500 strike price followed by the 17600 strike price. 


“On the technical front, 17450-17500 points zone still holds the sturdy wall for Nifty 50, and a decisive closure above the same could only trigger fresh longs in the system,” said Osho Krishan, senior technical and derivative analyst, Angel One.


In the put options segment, the 17300 strike price expiring on Thursday witnessed the highest addition of open interest. 


Open interest in the August futures of the Nifty 50 fell over 3% to about 10 mln, while the contract ended 0.5% higher at 17424 points. 


Among stocks, Siemens witnessed the addition of short positions after the company warned that global headwinds could affect demand resulting in a slowdown in capital spending. Shares of Siemens closed 4.5% lower at 2,614.65 rupees. 


Open interest in the August futures of Siemens surged 13% to 2.3 mln, indicating the addition of bearish bets. 


The Nifty Bank snapped its five-day gaining streak and ended marginally lower at 37989.25 points due to selling pressure at higher levels. 


In the call options of Nifty Bank expiring on Thursday, the highest open interest was at 38000 strike price and analysts expect the index to struggle to sustain above this level. 


The Nifty Bank index may find some support at around 37500 points as this strike price holds the highest open interest in the put options segment. 


–Nifty 50 Aug closed at 17424, up 77.70 points; 35.85-point premium to spot index

–Nifty 50 Sep closed at 17488, up 72.35 points; 99.85-point premium to spot index

–Nifty 50 Oct closed at 17528, up 64.95 points; 139.85-point premium to spot index


The total turnover in the futures and options segment of the National Stock Exchange rose to about 123 trln rupees, higher than 113 trln rupees on Tuesday.    


The turnover in index options was 123.2 trln rupees compared with 109.5 trln rupees on Tuesday. The total premium turnover of the index and stock options was 456.2 bln rupees compared with 482.3 bln rupees in the previous session. 


Reliance Industries, HDFC Bank, ICICI Bank, State Bank of India, Tata Motors, Maruti Suzuki India, Infosys, Bajaj Finance, Tata Consultancy Services, and Tata Power were among the most actively traded underlying stocks.  End


Edited by Aditya Sakorkar


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Source: Cogencis

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