More Stories

Informist, Wednesday, Jul 24, 2024

By Anshul Choudhary

MUMBAI – Options data suggest there was unwinding of long positions by traders in anticipation of profit booking after the Budget. Positioning in derivatives show the Nifty 50 may find support at 24000 points if profit booking intensifies. This indicates the 50-stock index may decline nearly 2% from today's close.

"FIIs (foreign institutional investors) have reduced their long positions but we are still not seeing any short build-up, so the downside is likely to be limited," said Nandish Shah, senior derivatives' analyst at HDFC Securities. Today, the Nifty 50 fell for the fourth straight session and closed 0.3% lower at 24413.50 points.

Some analysts expect further profit booking but they continue to stay bullish in the medium and long term, now that the Budget for 2024-25 (Apr-Mar) has been presented. "The Finance Minister presented a solid Union Budget, with policy continuity as the keystone. The fiscal consolidation path was maintained and the focus on capex over revex (revenue expenditure) continued," Emkay Global Financial Services said in its strategy report today. Further, the changes in capital gains taxes are unlikely to impact bullish sentiment in the market, analysts said.

Traders sold call options across the board and cut their long positions. The maximum open interest was at 25000 calls, followed by 24400 points, which is likely to act as resistance. Premiums on 24800 call of the Nifty 50 fell 23 rupees to 3.30 rupees, and that on 24400 level fell by 67 rupees to 87 rupees.

On the put side, there was buying in out-of-the-money puts, while traders sold at-the-money and in-the-money contracts. The highest open interest in puts was at 24000 strike prices, which is likely to act as immediate support. Premiums at 24000 puts fell 10 rupees to 3.70 rupees, that of 24100 strike prices fell 14 rupees to 7.70 rupees.

The July futures contract of the Nifty 50 closed at a premium of 8 points to the spot index. Open interest in the contract rose 8.3% to 12.59 mln, according to provisional data. 

--Nifty 50 Jul closed at 24421.50, down 41.60 points; 8-point premium to spot index

--Nifty 50 Aug closed at 24522, down 60.45 points; 108.50-point premium to spot index

--Nifty 50 Sep closed at 24648.25, down 71.40 points; 234.75-point premium to spot index

HDFC Bank, ICICI Bank, Reliance Industries, State Bank of India, Hindustan Aeronautics, Axis Bank, Bajaj Finance, Tata Motors, and Tata Motors were among the most actively traded underlying contracts.  End

Edited by Akul Nishant Akhoury

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. 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 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.