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Equity Futures: Nifty 50 may hit 17500 Fri if RBI policy favourable

Informist, Thursday, Aug 4, 2022

 

By Joe Milton

 

MUMBAI – Bets in the derivative segment on the Nifty 50 hint that the index may inch towards 17500 points on Friday in case of a favourable outcome from the Reserve Bank of India’s policy meeting. 

 

The three-day monetary policy meeting outcome will be announced on Friday and banking sources told Informist that the RBI won’t try to match the actions of other central banks like the US Federal Reserve. 

 

In July, the US Fed hiked the federal funds rate by 75 basis points for the second consecutive time to control inflation. For similar reason in eurozone, the European Central Bank hikes interest rate in July for the first time in 11 years. 

 

However, the baking source told informist that front-loading of policy actions has provided RBI some breathing space to sit back and watch.

 

In case of dovish comments from the Indian central bank, it would further improve the risk appetite among investors which may push the Nifty 50 index towards 17500 points. 

 

But, analysts expect the 50-stock index to face stiff resistance in the 17500-17550 points zone. This is backed by the positioning in the options series as the highest open interest in the call segment expiring on Aug 11 was at 17500 points. 

 

On the other hand, unfavourable move from the RBI may result in profit booking, which may drag the headline index towards 17100-17150 points. 

 

Considering today’s low of the Nifty 50 and its 200-day simple moving average, Rajesh Bhosale, technical and derivative analyst at Angel One recommended initiating long positions if the Nifty 50 falls to 17100 points. 

 

Today, the Nifty 50 index fell and touched a low of 17161.25 points due to panic selling on media reports that China has conducted precision missile strike in Taiwan Strait. 

 

But, the benchmark managed to recoup its losses and closed flat at 17382 points. Open interest in the August futures of Nifty 50 rose 5.6% to 10.4 mln, while the contract closed 0.2% lower at 17370 points. 

 

Considering the intraday bounce back, analysts said there could be a likely addition of long positions in the futures contract. 

 

The rate-sensitive Nifty Bank index will be in focus on Friday amid RBI policy outcome. Since technical indicators suggest that the index is in an overbought zone, analysts expect Nifty Bank to face immediate hurdle around 38200 points. 

 

The highest open interest in the call option segment of Nifty Bank contracts expiring on Aug 11 was at 38500 strike price followed by 38000 strike price. 

 

Analysts recommended initiating long positions in Nifty Bank index only if it falls to 36500-36800 points. Today, the Nifty Bank index closed 0.6% lower at 37755.55 points. 

 

–Nifty 50 Aug closed at 17370.00, down 37.15 points; 12.00-point discount to spot index

–Nifty 50 Sep closed at 17432.55, down 38.15 points; 50.55-point premium to spot index

–Nifty 50 Oct closed at 17474.00, down 31.35 points; 94.00-point premium to spot index

 

The total turnover in the futures and options segment of the National Stock Exchange rose to about 312.3 trln rupees higher than 123 trln rupees on Wednesday.    

 

The turnover in index options was 308.9 trln rupees compared to 123.2 trln rupees on Wednesday. The total premium turnover of the index and stock options was 642.2 bln rupees compared to 456.2 bln rupees in the previous session. 

 

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

 

Edited by Sushmita Mukherjee

 

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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© Informist Media Pvt. Ltd. 2022. All rights reserved.

 

Source: Cogencis

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