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Equity Futures: No clear trend for Nifty Bank, options data shows

Informist, Wednesday, Dec 7, 2022

 

By Vaibhavi

 

NEW DELHI – The trend for Nifty Bank remains unclear in the absence of any major trigger, as is evident from writers being active across call and put options of the index.

 

The Reserve Bank of India’s decision to raise repo rate by 35 basis points was already factored in by the market and hence failed to fuel any major gains in the banking index.

 

After testing a record high of 43515.05 points on Thursday, the Nifty Bank index fell because of profit booking in stocks within the sector and it has remained largely muted thereafter.

 

The index is facing a strong hurdle around 43300 points, and its inability to cross this mark will result in continuation of a rangebound movement, said Viraj Vyas, technical and derivatives analyst at Ashika Stock Broking.

 

A move towards 43300 points, a level that the index has struggled to sustain for the second straight session, implies an upside of 0.5% from today’s closing level.

 

Today, writing across out-of-the-money call options of 43100-43500 strike prices intensified, which shows that the sectoral index may find it difficult to move past those levels before the weekly options expiry on Thursday.

 

Among call options, the 43200 strike price contract commanded the highest open interest, closely followed by the 43300 strike price contract.

 

Support for the Nifty Bank index is seen in the range of 42000-42500 points, Vyas said. The put options of 42000-42500 strike prices held sizeable open interest.

 

The Nifty Bank index gave up early gains and ended the day 0.1% lower at 43098.70 points.

 

Analysts believe some short positions were also taken in the December futures contract of the Nifty 50 as open interest in the contract rose nearly 3%.

 

Just like Nifty Bank, movement of the Nifty 50 was also lacklustre. Without much change in investor sentiment and in the absence of any upside trigger, analysts expect the Nifty 50 to continue stay in the range of 18500-18800 points.

 

However, as the undercurrent in the market still remains positive, investors may choose to buy on dips towards 18300-18350 points, as long as the index stays above that level, Vyas said.

 

The Nifty 50 closed 0.4% lower at 18560.50 points.

 

–Nifty 50 Dec closed at 18673.70, down 97.65 points; 113.2-point premium to spot index

–Nifty 50 Jan closed at 18787.00, down 90.85 points; 226.5-point premium to spot index

–Nifty 50 Feb closed at 18872.00, down 90.70 points; 311.5-point premium to spot index

 

Total turnover in the futures and options segment of the National Stock Exchange was 151.86 trln rupees, against 135.39 trln rupees on Tuesday.

 

The turnover in index options was 149.23 trln rupees compared with 132.77 trln rupees in the previous session. The total premium turnover of index and stock options was 420.65 bln rupees compared with 356.76 bln rupees on Tuesday.

 

Adani Enterprises, Siemens, Asian Paints, Reliance Industries, ICICI Bank, HDFC Bank, State Bank of India, Infosys, Axis Bank, and Bajaj Finance were among the most actively traded underlying stocks.  End

 

Edited by Ashish Shirke

 

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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