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Informist, Friday, Aug 30, 2024

By Apoorva Choubey

MUMBAI – The Nifty 50 is poised to test the 25300-25400-point level next week, extending its rally to the fourth week in a row, going by the positioning in the weekly call options of the index. Additions of bullish bets by institutional investors in index futures also suggest that the uptrend in Indian equities may continue. 

Today, the index ended at its highest closing level of 25235.90 points, up 83.95 points or 0.3%. The Nifty 50 gained 1.7% this week as foreign investors turned net buyers of domestic shares after Chairman Jerome Powell signalled, at the Jackson Hole annual economic symposium last Friday, that the US Federal Reserve would cut interest rates very soon.  

The 25300 and the 25400 strike price call options of the Nifty 50 were the most actively bought, by volumes, today and hold the maximum open interest in the current weekly series. Their premiums jumped over 40% each, with an even bigger jump in open interest. 

Call writers have shifted their positions higher while buying interest has emerged at lower levels, said analysts at SAMCO Securities in a note. Significant open interest in the 25200 put option and the 25700 call option reflects a positive sentiment, as call writers adjust to higher levels, they said. 

The September futures contract of the Nifty 50 closed at a premium of 162.55 points to the spot index, much higher than the premium seen on Thursday. Open interest in the contract rose 5.8% to 15.46 mln, according to provisional data.

Some analysts said there could be profit booking in some overvalued sectors. "Caution may prevail and profit-taking could make a comeback as the market has been on an upward march for the last 11 trading sessions," noted the head of research at a local brokerage house. 

Among the sectors, information technology is witnessing bullish bets, as lower interest rates will mean a return of discretionary spending by US companies, especially in the banking and financial services space, said analysts. The Nifty IT index was the top gainer for the week with returns of 4%. 

--Nifty 50 Sep closed at 25398.45, up 133.25 points

--Nifty 50 Oct closed at 25512.00, up 130.05 points; 276.10-point premium to spot index

--Nifty 50 Oct closed at 25638.00; 402.10-point premium to spot index 

HDFC Bank, Reliance Industries, Bharti Airtel, Dixon Technologies, Bajaj Finance, ICICI Bank, Vodafone Idea, Tata Motors, Zydus LifeSciences, Racle Financial Services and Maruti Suzuki India were among the most actively traded contracts.  End

Edited by Saji George Titus

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