Informist, Thursday, Dec 15, 2022
By Vivek Kumar
MUMBAI – Traders added short positions in the Nifty 50 as the benchmark index witnessed its worst single-day decline in over two months today following hawkish comments by the US Federal Reserve.
The open interest in the December futures contract of the Nifty 50 jumped 9.3% to 11.49 mln. The premium between the December contract and the spot index also reduced sharply to 30.6 points today, as per provisional data, from 88.60 points on Wednesday.
“Short positions were added in bulk today,” said Anshul Jain, senior technical analyst at Lakshmishree Investment and Securities. “If Nifty 50 breaks below 18380-18400 points, then the possibility of a further decline towards 18100 points will open up,” Jain said.
The Nifty 50 fell 1.3% to close at 18414.90 points today before slipping below the key support level of 18400 points intraday.
In the options contracts expiring on Dec 22, traders aggressively sold call options of 18600 and 18700 points, which resulted in their premiums declining around 80% each.
Short positions were added in the shares of heavyweight bank and information technology companies also today.
“We feel the performance of the banking index would play a critical role in setting the tone ahead while others are showing a mixed trend,” said Ajit Mishra, vice president – technical research at Religare Broking. “Participants should restrict leveraged positions and maintain a few shorts also,” he added.
The premium on 18000 points put option jumped to 19.5 rupees today from 7.15 rupees on Wednesday, snapping a three-day winning streak. The premium on deeper-out-of-the-money put option of 17500 points also rose over 9%, reflecting the negative market sentiment today.
NIFTY BANK
The open interest in the December futures contract of the Nifty Bank declined 5.6% to 2.87 mln today, as per provisional data. The sectoral index snapped a five-day winning streak and ended 1.3% lower at 43498.20 points today.
In the options segment, the premiums of 44000 and 43800 points put option contracts fell around 76% and 72%, respectively. On the other hand, traders bought the put options of 43000, 42000 and 41000 points.
–Nifty 50 Dec closed at 18445.50, down 303.40 points; 30.60-point premium to spot index
–Nifty 50 Jan closed at 18563.40, down 291.80 points; 148.50-point premium to spot index
–Nifty 50 Feb closed at 18700.00, down 243.90 points; 285.10-point premium to spot index
Total turnover in the futures and options segment of the National Stock Exchange was 347.41 trln rupees, against 119.19 trln rupees on Wednesday.
The turnover in index options was 344.07 trln rupees compared with 116.16 trln rupees in the previous session. The total premium turnover of index and stock options was 513.35 bln rupees compared with 339.06 bln rupees on Wednesday.
HDFC Bank, Punjab National Bank, Indian Railway Catering and Tourism Corp, State Bank of India, Reliance Industries, ICICI Bank, Bank of Baroda, Axis Bank, Infosys, Federal Bank, Ambuja Cements, Bajaj Finance, and IndusInd Bank were among the most actively traded underlying stocks.
End
Edited by Maheswaran Parameswaran
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