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Informist, Monday, Sep 2, 2024

By Anjana Therese Antony

MUMBAI – Analysts said the short-term approach towards the Indian equity market remains positive even as traders sold call options of the Nifty 50 today after it hit a new record intraday and closing highs. The index is poised to extend gains for the fourteenth session on Tuesday. Analysts also said that investors may follow a "buy on dip" strategy going forward as India remains a good bet and is also a strong emerging market due to its robust macroeconomic fundamentals.

While the June quarter corporate earnings did not show significant growth for Indian companies, some analysts expect the pace to pick up in the coming quarters, with the demand environment anticipated to be better. Some of them said Apr-Jun earnings growth was the slowest in the last seven or eight quarters.

India's economic growth is expected to support investors' sentiment going forward. Morgan Stanley anticipates the country's GDP growth to be 6.8% for the current financial year, reflecting improved consumption and robust capital expenditure, especially private capital expenditure. For Apr-Jun, India's GDP growth moderated to 6.7% from 8.2% a year ago, but was in line with the broking firm's expectations. 

Today, the Nifty 50 and BSE Sensex ended 0.2% higher each at 25278.70 points and 82559.84 points, respectively. These indices are poised to make gains for the fourteenth session on Tuesday.

"People are selling call options around the 25700 level. This seems to be the resistance on the higher side and technical resistance is 25650 (points)," said Vipin Kumar, a senior technical and derivatives analyst at Globe Capital Market. Kumar sees 24900 points as a strong support for the Nifty 50 and sees investors booking their profits if the 50-stock index falls below this level. 

Premiums on call and put options expiring Thursday declined after the index hit its new record high. Premiums on calls in the range of 25200-25500 fell 17-42% and those on 25200-25000 puts declined 3-7%.

Meanwhile, the futures contracts of the Nifty 50 closed lower, but ended at a premium to the spot level. Foreign investors held more than 243,000 net long positions in index futures as of Friday, technical and derivatives analysts at different broking firms said. Meanwhile, domestic institutional investors, individual clients, and proprietary firms were net short on index futures as of Friday, Kumar of Globe Capital said.

--Nifty 50 Sep closed at 25338.30, down 38.60 points; 59.60-point premium to spot index

--Nifty 50 Oct closed at 25465.00, down 33.45 points; 186.30-point premium to spot index

--Nifty 50 Oct closed at 25588.00; down 35.85 points; 309.30-point premium to spot index

HDFC Bank, Reliance Industries, Bajaj Finance, ICICI Bank, Gujarat Gas, Dixon Technologies, State Bank of India, Bajaj Finserv, Axis Bank, Infosys, ITC, Hero MotoCorp, and Indus Towers were among the most actively traded contracts. End

Edited by Akul Nishant Akhoury

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