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Informist, Monday, Aug 12, 2024

By Anshul Choudhary

MUMBAI – Positioning in option contracts suggest traders are likely looking at a muted performance of benchmark indices in this truncated week, where equity markets are closed on Thursday on account of Independence Day. Analysts downplayed the impact of Hindenburg Research's allegations against the Securities and Exchange Board of India's Chairperson Madhabi Puri Buch, but there was some caution as traders sold call options.

The caution could also be attributed to global concerns related to the US economy. Gains across global markets were muted today with investors now waiting for US inflation figures for July, to ascertain the country's economic health and clarity on the interest rate trajectory. 

Today, the Nifty 50 closed marginally lower at 24347 points but did not see a sell-off, as some had feared when Hindenburg's allegations against SEBI chief first surfaced. On Saturday, US-based short-seller Hindenburg Research said Buch and her husband had stake in offshore funds which were also allegedly used by Vinod Adani, the elder brother of Adani Group Chairman Gautam Adani, to invest in Indian stocks, including Adani Group companies. This, the US firm said, raised the prospect of conflict of interest in the SEBI's investigation of the short-seller's allegations against the Adani Group in January 2023.

For weekly contracts expiring Thursday, traders sold out-of-the-money puts indicating expectations of limited downside or even some gains. However, they bought in-the-money puts, indicating expectations of selling pressure at higher levels. The maximum addition of open interest was at 23500 puts, followed by 23500 puts. The highest open interest on the put side was at 23500 strike prices, followed by 24000 strike prices.

On the call side, traders sold contracts ahead of India's July CPI data today, and that of the US on Wednesday. Traders sold call options across the board. The maximum open interest addition was at 24800-25500 calls, followed by 24500 calls. Analysts expect the index to face resistance around 25000 points for now, unless global cues improve.

The August futures contract of the Nifty 50 closed at a premium of 13 points to the spot index. Open interest in the contract rose 1.5% to 11.89 mln, according to provisional data.

--Nifty 50 Aug closed at 24360, down 41.50 points; 13-point premium to spot index

--Nifty 50 Sep closed at 24500, down 29.40 points; 153-point premium to spot index

--Nifty 50 Oct closed at 24626, down 27.35 points; 279-point premium to spot index

HDFC Bank, Adani Enterprises, Voltas, ICICI Bank, Reliance Industries, Adani Ports and Special Economic Zone, Oil and Natural Gas Corp, State Bank of India, Siemens, Trent, Jubilant Foodworks, and Axis Bank were among the most-actively traded underlying contracts.

End

Edited by Vidhi Verma

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