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Informist, Tuesday, Sep 3, 2024

By Anjana Therese Antony

MUMBAI – Bulls and bears were indecisive today, which was reflected by the Indian equity indices closing largely unchanged following a rally of at least 10 days. Traders have added short positions in the Nifty 50, given that there are doubts about the market's direction and as valuations remain expensive, derivatives analysts at various broking firms said. While the medium-to-long-term bias of investors remains positive, a few analysts believe market participants may wait for some significant cues before placing major bets in the coming days. 

The pause in today's rally also comes amid caution in most global markets ahead of a series of US economic data, due this week, which could throw some light on the degree and direction of interest rates in the world's largest economy. As hinted by the US Federal Reserve in its last meeting, market participants expect the apex bank to cut rates at its meeting this month. However, there are debates about the quantum of rate cut, with some anticipating a reduction by 25 basis points and another section expecting a 50-bps cut. 

Meanwhile, analysts are optimistic about the growth prospects of India, especially with the domestic market being a strong bet in the list of emerging markets. This will be supported by factors including better corporate earnings, benign inflation, lower interest rates, a pick-up in private capital expenditure, and recovery in rural demand.

The Nifty 50 ended at a fresh record closing high of 25279.85 points and the Sensex ended at 82555.44 points, both largely unchanged from the previous session. The 50-stock index took a breather today from a gaining streak of 13 sessions and the Sensex took a pause from a 10-day winning run. The near-term support for the Nifty 50 is pegged in the range of 25100-25000 points and resistance at 25400-25500 points, according to five technical and derivatives analysts.

In the options chain of the 50-stock index, premiums across options expiring Thursday declined. Premiums on calls in the range of 25300-25650 fell 3-18% and those on 25300-24900 declined 7-25%. Meanwhile, open interest of these contracts rose, with 25600-point call and 25300-point put options having the maximum additions.

The futures contract of the index also closed higher after closing lower in the previous session. The September series of the index closed at a premium to the spot market and open interest rose over 2% to 15.27 mln. Analysts said foreign investors are increasing their long positions in index futures, with them holding over 70% positions as of Monday, compared to 60% in the first week of August. 

--Nifty 50 Sep closed at 25344.85, up 4.40 points; 65.00-point premium to spot index

--Nifty 50 Oct closed at 25475.95, up 8.15 points; 196.10-point premium to spot index

--Nifty 50 Oct closed at 25585.00; down 1.40 points; 305.15-point premium to spot index

HDFC Bank, ICICI Bank, Hindustan Aeronautics, Bajaj Finance, Reliance Industries, Bajaj Finance, State Bank of India, Axis Bank, Kotak Mahindra Bank, Bajaj Finserv, Dixon Technologies, and SBI Cards and Payment Services were among the most actively traded contracts.  End

Edited by Tanima Banerjee

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