Informist, Friday, Mar 31, 2023
By Maitri Seth
MUMBAI – Traders bought call options near the 17500 strike price of the Nifty 50 due to hope that the index will retain today’s uptrend in the next session. Analysts say the Nifty 50 witnessed a “relief rally” today, largely because concerns of a global banking crisis subsided and US-listed technology stocks recovered.
The Nifty 50 today breached its crucial support of 17200 points in opening trade, and extended the gains to close near 17350 today. The gains were led by information technology stocks and index-heavy Reliance Industries.
Today, the Nifty 50 closed 1.6% higher at 17359.75 points today.
Traders bought call options near the 17300-17550 strike prices. Premiums at these levels surged 306-359%, or to 17-29 rupees. The maximum build-up in open interest was seen at call options of 17700 and 17600 levels, whose premium rose 63.9% and 233%, respectively.
The 17500 level is now a crucial resistance which, if surpassed, could trigger buying around 17700 points, said Rajesh Bhosale, technical analyst at Angel Broking.
Bhosale sees support for the Nifty 50 at 17250. Due to such expectations, traders sold put options at 17200-17300 levels. The maximum build-up in open interest was seen at put options of 17300 points, where the premium fell 67.6% to 70 rupees. Premiums at the 17200 and 17250 levels fell 72% and 69%, respectively.
Analysts say that factors such as data on the sales of Indian automobile companies in March, scheduled for Apr 1, and the Monetary Policy Committee meeting next week would further define the market’s momentum. “The commentary from RBI officials will remain in focus,” Bhosale said, adding that it would be interesting to see whether the RBI takes a pause after this.
Analysts expect the RBI to increase interest rates by 25 basis points this time.
Although positive momentum is likely, some analysts say that any further “overbuying” could result in some correction. “The market breadth is also inclined strongly on the advancing side. Amid all positivity, participants shouldn’t go overboard and maintain their focus on stock selection,” said Ajit Mishra, vice-president — technical research at Religare Broking.
The April futures contract of the Nifty 50 closed at a premium of 82.50 points to the spot index today. Open interest in the contract was 1.5% higher at 12.12 mln, as per provisional data.
–Nifty 50 Mar closed at 17442.25, up 229.15 points; 82.50-point premium to spot index
–Nifty 50 Apr closed at 17499.00, up 234.15 points; 139.25-point premium to spot index
–Nifty 50 May closed at 17295.00, up 155.05 points; 189.25-point premium to spot index
The total turnover in the futures and options segment of the National Stock Exchange was 123.01 trln rupees, as against 381.64 trln rupees on Wednesday.
The turnover in index options was 120.58 trln rupees, compared with 377.72 trln rupees in the previous session. The total premium turnover of index and stock options was 528.85 bln rupees, compared with 686.06 bln rupees on Wednesday.
Reliance Industries, HDFC Bank, ICICI Bank, Hindustan Aeronautics, and State Bank of India were among the most actively traded underlying stocks. End
Edited by Avishek Dutta
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