More Stories

Informist, Tuesday, Dec. 10, 2024

By Apoorva Choubey

MUMBAI – Market participants continued to write call and put options of the Nifty 50, across most strikes, which indicates that the index is expected to consolidate in the near term.

Globally, equity investors are refraining from adding more money into stocks and some are even going light on positions, amid caution ahead of upcoming key events, such as the US Federal Reserve's policy review next week, and a host of economic data in several regions.

Traders sold out-of-the-money call options of the Nifty 50 aggressively, indicating that gains, if any, are seen limited this week, analysts said. The 24700, 24800 and 25000 strike prices were the most actively written among call options, and hold sizeable open interest. 

On the put side too, out-of-the-money strikes were sold. The 24000 strike price saw the maximum volumes, followed by 24500. "Generally, when options are written across the board, it is an indicator that participants are in a wait-and-watch mode, and consolidation is expected," said the head of derivatives at a wealth management firm.  

The Nifty 50 ended at 24610.05, down 8.95 points from the previous close. Global uncertainties, including the West Asia crisis and disappointing trade data from China, added to the negative sentiment, said analysts. "Bullish traders held back on large positions, and the Nifty's recent momentum appears to be fading," Prashanth Tapse, senior vice president of research at Mehta Equities, said. 

Open interest in the December futures of the Nifty 50 was flat at 11.29 million. On the downside, the index may find support at its 100-day exponential moving average of 24340, said Hrishikesh Yedve, assistant vice president of technical and derivatives research at Asit C. Mehta Investment Intermediates. As long as the index sustains above this level, traders are advised to adopt buy-on-dips strategy, but resistance is seen at 24800 and 25000 points, he said. 

Foreign investors have reduced net short positions in index futures in the last few days, which has been accompanied by some cash buys in the spot market. However, they are still net short on index futures to the tune of $300 million, according to Nuvama Institutional Equities. In the last five days, they have reduced net shorts to the tune of $630 million. 

Among stock futures, some banks, metal and information technology companies saw long positions. Meanwhile, some consumer-driven firms' stock futures were sold.

--Nifty 50 Dec closed at 24684.00, down 10.60 points; 73.95-point premium to spot index

--Nifty 50 Jan closed at 24865.00, down 0.15 points; 254.95-point premium to spot index

--Nifty 50 Feb closed at 25015.00, up 3.70 points; 404.95-point premium to spot index

Reliance Industries, Infosys, HDFC Bank, Bajaj Finance, Tata Motors, Bharti Airtel, Axis Bank, ICICI Bank, Dixon Technologies India, Tata Steel, State Bank of India, BSE, Jindal Steel and Power, NMDC and Vedanta were the most actively traded contracts.  End

US$1 = INR 84.85

Edited by Tanima Banerjee

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.