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Informist, Friday, Oct. 4, 2024

By Anjana Therese Antony

MUMBAI – Restrictions on weekly index derivatives by the Securities and Exchange Board of India and rising worries about the escalating situation in West Asia led traders to add more short bets in the options chain of the Nifty 50 index. Premiums on deep out-of-the-money call options expiring Thursday more than halved and those on put options doubled in anticipation of a further fall of the index. The surge in crude oil prices is also likely to hit stocks next week, especially those of oil marketing companies, analysts said.

Analysts said foreign investors are reducing their long positions after the market regulator imposed stringent measures to reduce the trading volume in the futures and options market. They also started to pull out more money from the domestic market after an Israeli strike on central Beirut's Bachoura early Thursday left two killed and 11 wounded. Foreign investors net sold equities worth INR 27.52 billion Friday, while domestic institutional investors continued to support the market and net bought shares worth INR 89.05 billion.

Further, the stimulus measures announced by the People's Bank of China last week have led to outflows from India and will likely weigh on the domestic market in the near term. However, experts believe the medium-term outlook for the Indian equity market remains positive, backed by the government's measures to boost rural consumption, likely reduction in interest rates, better corporate earnings, and robust economic growth.

The Nifty 50 and Sensex closed around 1% lower each at 25014.60 points and 81688.45 points, respectively. The immediate support for the 50-stock index is 24900-24800 points and resistance is 25200-25400 points, according to technical and derivatives analysts. 

Premiums on call options of 25200-27000 strikes of the Nifty 50 declined 40-58% and those on 25050-24300 rose 72-107%. The highest open interest addition as well as concentration is at 27950-point call and 23100-point put options. On the futures front, the September contract of the index closed 1% lower and open interest rose 3.4% to 13.79 mln.

--Nifty 50 Oct closed at 25193.00, down 282.70 points; 178.40-point premium to spot index

--Nifty 50 Nov closed at 25345.00, down 278.50 points; 330.40-point premium to spot index

--Nifty 50 Dec closed at 25498.00, down 275.95 points; 483.40-point premium to spot index

HDFC Bank, Reliance Industries, ICICI Bank, Infosys, State Bank of India, Bajaj Finance, Tata Motors, Mahindra & Mahindra, Axis Bank, Bank of Baroda, ITC, Kotak Mahindra Bank, Tata Consultancy Services, Bharti Airtel, and Larsen & Toubro were among the most-actively traded contracts.  End

Edited by Ashish Shirke

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