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Informist, Monday, Nov. 11, 2024

By Apoorva Choubey 

MUMBAI – Traders sold call and put options of the Nifty 50 across the option chain in the November monthly series, suggesting that they are unsure of the index's likely movement in the coming days. The derivatives positioning also shows that volatility is expected to persist in the coming days, as global macroeconomic and geopolitical issues linger, while the September quarter earnings season draws to a close, according to derivatives analysts. 

In and out-of-the-money call options of the benchmark were sold alike in the monthly series, with premiums falling 2-40%. However, the 24500 and the 24300 strike price call options were the most actively sold and also hold among the highest open interest. 

Among put options of the Nifty 50, the 24000 and the 23500 strike prices have the maximum number of open positions and witnessed aggressive writing today. Premiums of out-of-the money puts fell 14-42%. 

"With inflationary pressures, weak earnings growth, and ongoing foreign outflows, the market faces a challenging environment, leaving investors cautious in the short term," said Vikram Kasat, head of advisory at PL Capital. The Nifty 50 has lost 3.3% in the last 30 days. 

Monday, the Nifty 50 closed at 24141.30 points, down 6.90 points from the previous close. Open interest in the index's November futures rose 1% to 11.43 million, signalling possible addition of some long bets. The contract provisionally ended at a premium of 85.65 points to the spot index. 

Prabhudas Lilladher expects the Nifty 50 to find crucial support at 23800-24000 levels, which it believes needs to be sustained for a positive bias. Resistance for the index is seen at 24300 points, analysts said. 

"As we approach the final phase of the earnings season, heightened volatility is likely to persist," said Ajit Mishra, senior vice president – research at Religare Broking. Given this outlook, traders are advised to adopt a hedged approach with a focus on selective stock picking, he said. Volatility gauge, India VIX, is up 8% for the past one month but ended 1.4% lower today at 14.2700.  

Among stock futures, Britannia Industries and Asian Paints continued to see addition of short bets amid a subdued consumer environment and weak earnings for the September quarter. Tata Motors and Trent, on other hand, are likely to have witnessed bullish positioning. 

--Nifty 50 Nov closed at 24226.95, up 7.10 points;

--Nifty 50 Dec closed at 24373.00, down 1.70 points; 231.70-point premium to spot index

--Nifty 50 Jan closed at 24537.00, up 4.70 points; 395.70-point premium to spot index

Asian Paints, HDFC Bank, Tata Motors, State Bank of India, Reliance Industries, ICICI Bank, UPL, PFC, Britannia Industries, REC, Trent, Aarti Industries, Axis Bank, Infosys, Hindalco Industries, Divi's Laboratories and Mahindra & Mahindra were the most actively traded contracts.  End

Edited by Akul Nishant Akhoury

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