Informist, Tuesday, Feb 28, 2023
By Vivek Kumar
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MUMBAI – Traders sold 17000 points and deeper out-of-the-money put options of the Nifty 50 today, even as the negative sentiment persisted in the market. In fact, the premium on the 17000-point strike price contract, which holds the highest open interest on the put side, fell for the fourth consecutive session today.
This indicates traders see little chances of the Nifty 50 breaching 17000 points, at least till this Thursday. However, analysts were cautious as the benchmark indices recorded a third consecutive month of losses.
The Nifty 50 today closed 0.5% lower at 17303.95 points, the lowest since Oct 14. This was the eighth consecutive session of decline for the index, which has now lost 2% this month and nearly 8% in three months.
The sentiment is likely to remain negative in the near term, as indicated by the rise in premiums for put options of the 17200-17400 points strike prices.
Even as the relative strength indicator reading showed the market being in oversold territory, analysts said there was no confirmation of a trend reversal as of now.
“Today, we tested monthly average of 17272 points. We did not close below that, which is a good sign for now,” said Rohit Srivastava, founder and market strategist at Indiacharts.com. “But we need follow-up confirmation of actual trend reversal, which will only come if we move above 17500 points.”
On the call side of the Nifty 50, the maximum open interest build-up was seen at the 17400-point strike price, followed by 17500 points. The premium on both the contracts fell today for the eighth consecutive session.
Srivastava said that if the Nifty 50 falls below 17272 points, the next support level is at as low as 16700 points.
Open interest in the March futures contract of the Nifty 50 rose nearly 9% today to 12.08 mln, as per provisional data.
–Nifty 50 Mar closed at 17406.05, down 91.90 points; 102.1-point premium to spot index
–Nifty 50 Apr closed at 17508.00, down 86.60 points; 204.05-point premium to spot index
–Nifty 50 Apr closed at 17567.00, down 89.20 points; 263.05-point premium to spot index
The total turnover in the futures and options segment of the NSE was 224.91 trln rupees, against 154.13 trln rupees on Monday.
The turnover in index options was 222.45 trln rupees compared with 151.87 trln rupees in the previous session. The total premium turnover of index and stock options was 567.39 bln rupees, compared with 572.56 bln rupees on Monday.
Adani Enterprises, Reliance Industries, HDFC Bank, Vedanta, Bank of Baroda, Adani Ports and Special Economic Zone, HCL Technologies, ICICI Bank, Kotak Mahindra Bank, State Bank of India, Axis Bank, Infosys, Ambuja Cements, Biocon, Asian Paints, and Housing Development Finance Corp were among the most actively traded underlying stocks. End
Edited by Avishek Dutta
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