Informist, Tuesday, Feb 8, 2022
By Joe Milton
MUMBAI – The Nifty 50 index fell sharply in the initial hours of trade and bets in the derivative segment suggest that the index has entered the oversold territory. However, covering of short positions by traders helped the index to close in the green. Analysts expect the index to head towards 17500 points in the coming sessions.
The Nifty 50 put-to-call ratio suggested an oversold situation and the long-to-short ratio of foreign institutional investors in the index futures was also highly oversold, hence, such bounces from key support levels are evident, said Rajesh Bhosale, technical and derivative analyst at Angel One
The covering of short positions by traders helped the index to sustain gains and close 0.3% higher at 17266.75 points. Open interest in February futures of Nifty 50 was down 2% at 9.7 mln.
The 50-stock index touched an intraday high of 17306.45 points, and if the index surpasses this level it may trigger more short covering and lead to positive momentum in the short term, said Ruchit Jain, lead research, 5paisa.com.
In the options segment of Nifty 50 expiring on Thursday, the highest open interest was at 17500 strike price followed by 17800 strike price. Hence, in the near term, analysts expect the index to face a hurdle around 17500 strike price.
On the downside, the benchmark index is expected to find support at 17000 strike price and the highest open interest in the put options segment was at this strike price.
On the stock-specific front, traders added long positions in the February futures of TVS Motor Co on the back of strong revenue growth in the quarter ended December.
Open interest in the February futures of the stock surged 26% to 9.4 mln, while the stock closed 3.1% higher at 656.50 rupees in the cash market.
–Nifty 50 Feb ended at 17256.65, up 38.35 points; 10.10-point discount to spot index
–Nifty 50 Mar ended at 17320.00, up 40.35 points; 53.25-point premium to spot index
–Nifty 50 Apr ended at 17371.00, up 29.65 points; 104.25-point premium to spot index
The total turnover in the futures and options segment of the National Stock Exchange was 99.4 trln rupees compared to 72 trln rupees on Monday.
The turnover in index options was at 96.1 trln rupees against 68.7 trln rupees the previous day. The total premium turnover of index and stock options was 473.4 bln rupees compared to 390.7 bln rupees on Monday.
The most actively traded underlying stocks were Tata Power, Tata Motors, State Bank of India, Tata Steel, Reliance Industries, ICICI Bank, Infosys, Bank of Baroda, Housing Development Finance Corp, and Bajaj Finance. End
Edited by Maheswaran Parameswaran
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Source: Cogencis