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Equity Futures: Data points to bearish note in last week of 2022

Informist, Friday, Dec 23, 2022


By Vivek Kumar


MUMBAI – Traders lapped up the 17000-point strike price put option of the Nifty 50 today and the contract held the maximum open interest, reflecting an increase in bearish bets due to concerns over rising COVID-19 cases in some countries.


Data indicating a strong labour market in the US also led to fear that the Federal Reserve could remain hawkish for a longer time.


The Nifty 50 closed 1.8% lower at 17806.80 points today, its lowest level on a closing basis in nearly two months. This was the steepest single-day fall in the benchmark index in nearly three months.


Open interest in the December futures contract of the Nifty 50 soared nearly 10% to 11 mln, according to provisional data, indicating the addition of short positions. A sharper decline in the broader market is likely to have triggered further bearish sentiment.


“If 17800 points level is not held, then a further 200-300 points correction could be seen next week,” said Ratnesh Goyal, senior technical and derivatives analyst at Arihant Capital Markets.


The upcoming week will be all the more crucial for markets as December futures and options contracts will expire on Thursday. Amid the gloomy near-term outlook, market participants will watch what kind of positions (long or short) are rolled over to the January series.


After the 17000-point strike price contract, the 17500-point contract had the maximum open interest on the put side. The premium on the 17000-point put option rose 53%, while that on the 17500-point put option nearly tripled.


On the call side, traders sold the 18000-point strike price contract. Its premium slumped 71% and open interest rose a whopping 8.5 mln to 9.8 mln.


Bearish positions were added across most sectors and stocks today as the market decline was broad-based, with 48 Nifty 50 stocks ending lower.


Adani Ports and Special Economic Zone was the worst hit, falling 7.3% to 794.10 rupees, recording its worst single-day decline in 10 months.


The stock has fallen below 200-day moving average on daily chart and could fall further till 770 rupees, Goyal said.


–Nifty 50 Dec closed at 17880.10, down 290.25 points; 73.30-point premium to spot index

–Nifty 50 Jan closed at 17993.00, down 280.85 points; 186.20-point premium to spot index

–Nifty 50 Feb closed at 18083.00, down 287.30 points; 276.20-point premium to spot index


The total turnover in the futures and options segment of the National Stock Exchange was 108.38 trln rupees, against 410.72 trln rupees on Thursday. The volume was sharply higher on Thursday due to the expiry of the weekly derivatives contract. 


The turnover in index options was 102.97 trln rupees compared with 406.66 trln rupees in the previous session. The total premium turnover of index and stock options was 514.96 bln rupees compared with 734.27 bln rupees on Thursday.


HDFC Bank, Adani Enterprises, Reliance Industries, ICICI Bank, Ambuja Cements, Kotak Mahindra Bank, Axis Bank, State Bank of India, Adani Ports and Special Economic Zone, Infosys, Tata Motors, IndusInd Bank, and Bank of Baroda were among the most actively traded underlying stocks.  End


Edited by Avishek Dutta


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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Source: Cogencis

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