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Informist, Thursday, Sep 19, 2024

By Anshul Choudhary

MUMBAI – Options data suggest the Nifty 50 may not see the sharp gains predicted earlier in case of a 50-basis-point rate cut by the US Federal Reserve. Traders sold out-of-the-money call options as the larger cut raised concerns that the Fed may have done it seeing a slowdown in the US economy.

"We believe Equities (risky assets) will do well on the back of US monetary policy normalisation albeit with volatility given there is concern about risk of a hard landing (US recession)," Yogesh Kalwani, head of investments at InCred Wealth, said in a note today.

With concerns of a slowdown in the US, traders took out part of their profits after the Nifty 50 hit a fresh lifetime high. The Nifty 50 fell nearly 200 points from its intraday high to end at 25415.80 points, up 0.2%.

Traders sold call options above 25550 strike prices in anticipation that selling for profit may continue in the coming session. However, they continue to buy in-the-money calls, which even saw short-covering as strong domestic flows are expected to help indices recover from any correction. Moreover, analysts expect foreign flows to improve as interest rates come down in the US, making emerging markets such as India attractive for them.

Call options of 27000 strike prices had the highest open interest and saw the maximum addition of open interest. After that, the maximum open interest was at calls of 26000 and 25500 strikes.

Traders sold put options across the board as the spot market witnessed gains. Strike prices between 23000 and 25500 saw significant open interest addition. The maximum open interest was at 25000 puts, followed by 24000 puts.

The September futures contract of the Nifty 50 closed at a premium of 90.20 points to the spot index. Open interest in the contract rose 0.4% to 13.29 mln, according to provisional data. 

--Nifty 50 Sep closed at 25506.00, up 109.90 points; 90.20-point premium to spot index

--Nifty 50 Oct closed at 25630.00, up 110.20 points; 214.20-point premium to spot index

--Nifty 50 Nov closed at 25735.30; up 100.90 points; 319.50-point premium to spot index

HDFC Bank, Vodafone Idea, Indus Tower, Hindustan Aeronautics, Reliance Industries, NTPC, Dixon Technologies, Bharti Airtel, Tata Consultancy Services, Infosys, State Bank of India, and REC were the most-actively traded contracts.  End

Edited by Rajeev Pai

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