Informist, Thursday, Oct 27, 2022
By Vaibhavi
NEW DELHI – The strong momentum in the market since last week helped the Nifty 50 settle the October derivatives series 1.5% higher. On the back of the underlying positive bias, technical analysts expect the Nifty 50 to build on its gains and inch higher towards its lifetime high in the November series.
In a truncated expiry week, the rollover of positions of Nifty 50 futures from the October to the November series was at around 50% as of Tuesday. This was lower than the average of 64% for the past three expiries during the same time, reports showed.
The lower rollovers can be attributed to the brief expiry week that was cut short on account of holidays. Some caution ahead of the Federal Reserve’s monetary policy outcome on Nov 2 also kept investors away from rolling over positions to the November derivatives series.
The undercurrent in the market remains bullish, according to Sudeep Shah, head of technical and derivative research at SBICAP Securities. He believes the addition of positions in the Nifty 50’s November futures are likely to pick up post the Fed’s monetary policy outcome.
The domestic market has already priced in the Fed’s rate hike and is now merely waiting for the decision to be out, Shah said.
An improvement in the sentiment among foreign institutional investors, as they have cut down their net short positions in index futures, seen at the start of the October series, supports Shah’s view.
The net long-to-short ratio of FIIs moved to 33% as on Tuesday from 13% seen at the start of the October series.
Once the headline index decisively moves past its crucial resistance of 17800 points, it is likely to move towards 18000-18100 points, said Osho Krishan, senior technical derivative analyst at Angel One.
Out-of-the-money call options of the 18400 strike price, expiring on Nov 3, held the highest open interest, followed by the 17800 strike price contract.
The Nifty 50 has struggled to decisively surpass the 17800-mark for three sessions in a row.
Today, the Nifty 50 opened higher and managed to remain in positive territory through the session. However, the headline index struggled to surpass the 17800-mark and ended 0.5% higher at 17736.95 points.
Metal stocks were the stars in today’s trade, as a fall in the dollar index below the 110 mark this week improved sentiment for the sector.
Consequently, traders aggressively covered their short positions in Vedanta, Jindal Steel & Power, and JSW steel, while spurts of long positions were added across Tata Steel, Hindalco Industries and National Aluminium Co.
–Nifty 50 Nov closed at 17803.10, up 114.45 points; 66.15-point premium to spot index
–Nifty 50 Dec closed at 17862.00, up 113.55 points; 125.05-point premium to spot index
The total turnover in the futures and options segment of the NSE rose to 269.70 trln rupees from 140.67 trln rupees on Tuesday.
In the index options segment, the turnover climbed to 265.53 trln rupees from 135.88 trln rupees on Tuesday. The total premium turnover of index and stock options rose to 63.72 bln rupees from 489.67 bln rupees.
Bajaj Finance, Ambuja Cements, Tata Steel, Adani Ports and Special Economic Zone, Infosys, Adani Enterprises, Axis Bank, HDFC Bank, ICICI Bank, and Reliance Industries were among the most actively traded underlying stocks today. End
Edited by Avishek Dutta
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