More Stories

Informist, Monday, Oct. 7, 2024

By Anjana Therese Antony

MUMBAI – More short positions were added to the derivatives chain of the benchmark Nifty 50 Monday as the index fell further to a month's low, extending losses for the sixth session in a row. Premiums on out-of-the-money call options of the index expiring Thursday halved and those on puts rose marginally, hinting at a further fall in the index. "Looking ahead, the Indian market's trajectory will hinge on global developments, investor reactions to electoral outcomes, and the implications of the RBI's policy stance," Vikram Kasat, head of advisory at PL Capital Markets Pvt. Ltd., an arm of brokerage Prabhudas Lilladher, said in a note.

The domestic market, which saw a bull run last month on optimism about the US Federal Reserve's rate-cut trajectory, has seen investors rush to take out profits since last week on rising geopolitical tensions in West Asia and foreign outflows due to stimulus measures in China. Analysts said the current fall was long awaited, especially after the bull run. They expect the domestic market to fall some more in the short term on the back of likely weak corporate earnings, the growing uncertainty in West Asia, and rising crude oil prices.

The Nifty 50 closed 0.9% lower at 24795.75 points and the BSE Sensex ended 0.8% lower at 81050.00 points. The near-term support for the 50-stock index is pegged at 24600-24500 points and resistance at 24900-25000 points, according to technical and derivatives analysts at different broking firms. About 85% of stocks traded on the National Stock Exchange and 84% of those on the BSE closed in the red.

Premiums on 24800-25800 call options of the Nifty 50 expiring Thursday declined 40-49% and those on 24700-24100 put options rose 7-41%. The maximum open interest addition was seen at the 25000-point call and 23100-point put contracts. The October futures contract of the index also reflected the fall in the cash market and closed 0.7% lower. Open interest of the contract rose 6% to 14.64 mln.

Foreign investors have been cutting their long positions in index futures over the past couple of weeks. On Friday, they increased their short positions in index futures to 42% from 34% on Thursday. The recent restrictions announced by the market regulator on weekly index derivatives, in an attempt to reduce trading volumes in the futures and options market, also made foreign investors reduce their long positions, analysts said. Experts believe the returns from the equity market would be lower this year due to expensive valuations and a slowdown in earnings growth. However, the long-term view remains bullish, backed by the government's push to improve rural consumption, infrastructure development, green shoots of recovery in demand, and a likely reduction in interest rates. 

--Nifty 50 Oct closed at 25005.70, down 168.15 points; 209.95-point premium to spot index

--Nifty 50 Nov closed at 25140.00, down 187.20 points; 344.25-point premium to spot index

--Nifty 50 Dec closed at 25297.80, down 180.80 points; 502.05-point premium to spot index

HDFC Bank, ICICI Bank, State Bank of India, Axis Bank, Reliance Industries, Kotak Mahindra Bank, Adani Enterprises, Infosys, IndusInd Bank, Punjab National Bank, Federal Bank, Titan Co, ITC, Vedanta, Tata Power, and Mahindra & Mahindra were the most-actively traded contracts.  End

Edited by Rajeev Pai

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.