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Informist, Monday, Dec. 23, 2024

By Anshul Choudhary

MUMBAI – Traders refrained from adding long positions in the derivatives market despite the Nifty 50 posting gains Monday after five days of decline. While the Nifty 50 saw some gains amid positive cues from the US market, derivative traders still expect range-bound movement for the rest of the week, analysts said.

"Didn't see much positive movement in derivatives, data show the market may end in range of 23500-24000 (points) on expiry," Ajit Mishra, senior vice-president of technical research at Religare Broking, said. He advised derivative traders to prefer spread strategies or focus on specific stocks.

The Nifty 50 ended at 23753.45 points, up 0.7%, after falling nearly 5% last week. This came after softer-than-expected US inflation data raised hopes of more cuts in interest rates in the US. Further, a sharp decline last week had pushed the benchmark indices into an oversold zone on the technical charts, which may have persuaded some investors to buy, analysts said.

While the Nifty 50 rose Monday, derivatives data showed gains are likely to be limited during the truncated week as the market will be closed Wednesday for Christmas. Traders sold out-of-the-money call options with the highest open interest addition at 31000-point calls, followed by 23800-24000 points. Analysts said the index is likely to face strong resistance at 24000 points and short covering is likely above this level. Premiums for out-of-the-money call options rose, while the same for in-the-money call options fell.

On the put side, premiums declined across the board with the highest open interest addition at 23500 strike price, followed by 23700 strike price. These levels are likely to act as supports for the Nifty 50.

--Nifty 50 Dec closed at 23768.00, up 142.35 points; 14.55-point premium to spot index

--Nifty 50 Jan closed at 23936.05, up 142.65 points; 182.60-point premium to spot index

--Nifty 50 Feb closed at 24075.00, up 134.50 points; 321.55-point premium to spot index

HDFC Bank, Reliance Industries, ICICI Bank, Axis Bank, State Bank of India, Kotak Mahindra Bank, Bharti Airtel, Tata Motors, Infosys, and Larsen & Toubro were the most actively traded contracts.  End

Edited by Rajeev Pai

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