Informist, Thursday, Sep 30, 2021
By Ankika Biswas
MUMBAI – The September derivatives series was the second-best for domestic equities in 2021, and this comes after strong gains in August series. But analysts have started ringing alarm bells as the risk-reward is turning unfavourable in an overheated market. The headline index has gained 6% in the September series, following the 5% gains in August.
The upside for the index looks restricted as it will face strong resistance at 17800-18000 points, as per positioning of the index’s weekly options, said an analyst at Axis Securities.
Today, writers were active in the out-of-the-money call options of 17700, 17800 and 18000 strike prices expiring on Oct 7, as they believe the index is likely to take a back foot upon touching these levels.
As a result, the premiums on these contracts fell 36-56%.
The cautious stance held by analysts was also corroborated by investors to some extent, as the quantum of positions rolled over to the October series was lower than the September one.
As per provisional data at 1500 IST, 68% of the positions have been rolled over, lower than the 83% seen in the September series. The data suggested a mixed trend of unwinding of the current long positions and rollover of long positions to October.
Today, the Nifty 50 ended 0.5% lower at 17618.15 points. The open interest in the October futures contract was up 43.5% at 12.07 mln.
Meanwhile, mostly long derivative positions of Nifty Bank were rolled over to the October series as investors expected it to outperform the Nifty 50. Data suggested that 77% of the positions were rolled over, which were largely in line with the 79% witnessed in the prior series.
The sectoral index has risen over 5%, a tad lower than the Nifty 50’s near 6% upmove in the September series. Today, the Nifty Bank closed 0.8% lower at 37425.10 points.
The analyst believes that the Nifty Bank is poised to test 38000 points going forward, and a close above that key level can unlock further growth potential to 38500-38800 points.
Meanwhile, analysts held on to the positive outlook for shares of index-heavy Reliance Industries following the 13% upmove in the September series.
While the quantum of the positions rolled over to October were lower than the previous one, which were mostly shorts, analysts believe that covering of these positions will push the scrip to 2,600-2,650 rupees.
Today, shares of RIL closed 0.3% lower at 2,519.25 rupees, falling for the second session.
-–Nifty 50 Sep ended at 17619.10, down 88.90 points; 0.95-point premium to spot index
-–Nifty 50 Oct ended at 17611.40, down 121.20 points; 6.75-point discount to spot index
-–Nifty 50 Nov ended at 17643.95, down 129.25 points; 25.8-point premium to spot index
Total turnover in the futures and options segment of the NSE was 128 trln rupees today, higher than 67.9 trln rupees on Wednesday.
The turnover in index options was 123.5 trln rupees compared with 62.4 trln rupees in the previous session. The total premium turnover of index and stock options was 306 bln rupees compared with 288 bln rupees on Wednesday.
Reliance Industries, Tata Steel, Infosys, ICICI Bank, State Bank of India, HDFC Bank, Bajaj Finance, Tata Power, ITC, and Tata Motors were the other most actively traded stocks today. End
Edited by Aditya Sakorkar
Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to [email protected]
© Informist Media Pvt. Ltd. 2021. All rights reserved.
Source: Cogencis
