Informist, Tuesday, Aug 8, 2023
By Padmini Dhruvaraj
MUMBAI – Call options writers were active at 19600-19700 strike prices expiring Thursday as the Nifty 50 snapped its two-day winning run to close lower.
Analysts said the index retracted after breaching its resistance levels of 19600. The 50-stock index settled 0.1% lower at 19570.85 points, dragged by shares of metals, fast-moving consumer goods, and oil and gas companies.
“Today, Indian markets were subdued ahead of key events across the globe and domestic MPC (monetary policy committee) meeting outcome, with PSU (public sector undertakings) banking and pharma sector stocks providing some support,” said Riches Vanara, technical and derivatives analyst at StoxBox.
The call options premium of at-the-money strike 19550 also fell 35.33% to 70.30 rupees, indicating a bearish sentiment in the market. Some investors also sold in-the-money call options at 19500, 19450, and 19400 strikes.
Meanwhile, the 19600 strike price had the highest net change in open interest with 5.72 mln new positions being added. However, the premium of the strike fell 40.56% to 46.90 rupees.
Some aggressive call options selling was also seen at the 19800, 19900, and 20000 strike prices. The 20000 strike price had the second-highest open interest on the call side, with 1.96 mln positions.
On the other hand, put writers unwounded their positions, which pushed the put options premiums of 19500-19700 contracts 8-20% higher. The 19600 strike had the highest net change in open interest of 2.1 mln and the premiums of those rose 17.51% to 82.90 rupees.
Additionally, the bearish sentiment also led to some aggressive put selling at 18400, 19150, 19400, and 19300 strike prices.
The August futures contract of the Nifty 50 closed at a premium of 38.15 points to the spot index today. Open interest in the contract rose 1.48% to 11.34 mln, according to provisional data.
Analysts said markets will likely trade in a range ahead of the Reserve Bank of India policy on Thursday. “RBI meeting kicked off today, the results of which would be declared on Thursday, thus expect market to consolidate, while interest sensitive sectors are likely to be in focus,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services Ltd.
The RBI is widely expected to keep the key interest rate unchanged at 6.50% and retain its stance of “withdrawal of accommodation”.
However, “the index is anticipated to attract bullish strength, provided the support of 19500 remains intact on a closing basis,” said Vanara.
Along with the RBI policy, investors will also look out for global economic data this week including the US and China inflation data for July due Thursday and UK’s Apr-Jun quarterly GDP estimate and US Producer Price Index for July both due Friday.
–Nifty 50 Aug closed at 19609.00, down 52.05 points; 38.15-point premium to spot index
–Nifty 50 Sep closed at 19718.00, down 49.55 points; 147.15-point premium to spot index
–Nifty 50 Oct closed at 19817.30, down 47.00 points; 246.45-point premium to spot index
Adani Ports and Special Economic Zone, Dixon Technologies, HDFC Bank, Adani Enterprises, Cipla, Maruti Suzuki, Biocon, State Bank of India, Tech Mahindra, ICICI Bank, Reliance Industries, Hero MotoCorp, NTPC, Infosys were among the most actively traded underlying stocks. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
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