Informist, Friday, Sep 30, 2022
By Vivek Kumar
MUMBAI – The Reserve Bank of India’s policy today helped domestic equities bounce back after seven sessions of losses, but the action in the futures and options segment was not very aggressive, an indication that the market remains cautious, at least in the short term.
Analysts termed today’s gains as ‘technical bounce-back’ and ‘mere pullback’, and said the near-term trend still remains that of ‘sell-on-rise’.
The gains in the market came today as there were no negative surprises in the RBI policy as it raised repo rate by 50 basis points and kept inflation projection unchanged.
The Nifty 50 ended 1.6% higher to settle at 17094.35 points today, while the Nifty Bank outperformed the benchmark and closed with gains of 2.6% at 38631.95 points. In the past seven sessions, the benchmark index had fallen nearly 6%, and the Nifty Bank had shed around 9%.
In the options segment, the premium on 17600 points call option, which saw maximum addition of open interest today, rose over 39%. The call option premium had fallen to around 6 rupees on Thursday from 415 rupees seven sessions ago.
Similarly, 17200 points call option, which is closer to the Nifty 50’s current value, witnessed its premiums double today. In the last seven sessions, the premiums had dropped to 46 rupees from 720 rupees.
“Short-term traders should definitely come out because this is a jigsaw period. For them, 16800 points should be the line in stand (support) when it comes to Nifty 50,” said Viraj Vyas, technical and derivative analyst-institutional equities at Ashika Group. “For Nifty Bank, the support is around 37400-37500 points level, the analyst said.
On the put side of the Nifty 50, 16700- and 16800- points strike price contracts had the highest open interest. For the Nifty Bank, it was 43000- and 38000- points.
“We entered October series with 87% short positions from foreign institutional investors. Price action preceding the series was also very bearish. So, to a certain extent we can say that, it (today’s gains) was short covering,” Vyas said.
In the futures segment, the open interest in Nifty 50 rose over 8% to 12.4 mln, as per provisional data.
For long term investors, Vyas recommended buy on dips strategy. “If one has cash, they should keep the gunpowder dry and look to buy the dips,” he said.
–Nifty 50 Oct closed at 17106, up 272.70 points; 11.65-point premium to spot index
–Nifty 50 Nov closed at 17160, up 272.50 points; 65.65-point premium to spot index
–Nifty 50 Dec closed at 17220, up 144.60 points; 125.65-point premium to spot index
The total turnover in the futures and options segment of the National Stock Exchange was 95.6 trln rupees, lower than 292.33 trln rupees on Thursday.
Turnover in index options was 92.32 trln rupees compared with 288 trln rupees on Thursday. The total premium turnover of the index and stock options was 631.4 bln.
Adani Enterprises, Reliance Industries, HDFC Bank, ICICI Bank, State Bank of India, Bajaj Finance, Infosys, Tata Motors, Axis Bank, Adani Ports and Special Economic Zone and Ambuja Cements were amongst the most actively traded underlying stocks today. End
Edited by Maheswaran Parameswaran
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.
Informist Media Tel +91 (11) 4220-1000
Send comments to [email protected]
© Informist Media Pvt. Ltd. 2022. All rights reserved.
Source: Cogencis
