Home Commodity Market News Equity Futures: Nifty 50 seen in thin range; RBI policy in focus

Equity Futures: Nifty 50 seen in thin range; RBI policy in focus


Informist, Tuesday, Dec 6, 2022


By Vivek Kumar


MUMBAI – The benchmark Nifty 50 is likely to remain in a narrow trading range on Wednesday as market participants do not expect the Reserve Bank of India’s monetary policy decision to have a significant impact.


In the options contracts expiring this Thursday, premiums of major call and put options of the Nifty 50 fell today with the 18600-point contract witnessing maximum change open interest on both sides.


The premiums of 18800 points call option, which was also among actively traded contract, fell around 50% today to 30 rupees. 


“I see 18500 points as a strong support and 18800 points as a stiff resistance for the Nifty 50,” said an analyst with Axis Securities. The analyst said he does not expect the benchmark index to break these levels on Wednesday.


Market participants expect the RBI to hike repo rate by 35 basis points, down from 50 bps hikes seen in the previous three meetings.


Analysts believe the downside for the Nifty 50 is limited given the resilience shown by Indian equities so far on the back of strong domestic economy and corporate earnings.


“For tomorrow (Wednesday), if market were to correct and if Nifty 50 falls to around 18550 levels, then one should buy,” said Nandish Shah, senior technical and derivatives analyst at HDFC Securities. Shah also sees resistance for Nifty 50 around 18800 levels.


Today, the Nifty 50 closed 0.3% lower at 18642.75 points due to weak global cues.


On the put side, traders added maximum open interest at 18100 points strike price after 18600 points today. The premium of 18100 points put option fell around 24% to 1.95 rupees.


Broadly, call writing was more aggressive today compared to put options writing, in line with the overall market trend.


The December futures contract of the Nifty 50 ended at a premium of 127.75 premium to the spot index today, with open interest rising 2.2% to 11.6 mln, as per provisional data.


Analysts were positive on the Nifty Bank as well. The sectoral index is seen in the range of 43000-43800 points. Today, it closed 0.5% lower at 43138.55 points.


–Nifty 50 Dec closed at 18770.50, down 47.25 points; 127.75-point premium to spot index

–Nifty 50 Jan closed at 18879.50, down 39.45 points; 236.75-point premium to spot index

–Nifty 50 Feb closed at 18960.00, down 47.80 points; 317.25-point premium to spot index


The total turnover in the futures and options segment of the National Stock Exchange was at 135.39 trln rupees, against 109.65 trln rupees on Monday.


The turnover in index options was 132.77 trln rupees compared with 106.96 trln rupees in the previous session. The total premium turnover of index and stock options stood at 356.76 bln rupees compared with 386.55 bln rupees on Monday.


Adani Enterprises, Reliance Industries, ICICI Bank, Punjab National Bank, HDFC Bank, State Bank of India, Bank of Baroda, Infosys, Axis Bank, Tata Power, Ambuja Cements and Bajaj Finance were among the most actively traded underlying stocks.  End


Edited by Maheswaran Parameswaran    


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