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Informist, Monday, Jan. 13, 2025

By Alina Geogy

MUMBAI – Traders placed more bearish bets on the derivatives segment of the Nifty 50 on Monday as they expect the benchmark index to fall some more over the coming days, technical and derivatives analysts said. Latest data pointing to a strong labour market in the US has led to worries that the US Federal Reserve could take longer than anticipated to cut interest rates again. This, along with the plunge in the rupee to a record low against the dollar and the rise in crude oil prices, led to a sharp slide in Indian equities on Monday.

The benchmark Nifty 50 closed the session 1.5% lower at 23085.95 points, the lowest level in over seven months. The 50-stock index fell for the fourth straight session and is now down over 12% from its all-time high of 26277.35 points, which it hit on Sept. 27. The broader market also witnessed a sell-off, with 86% of all stocks traded on the NSE closing in the red.

There are no signs of reversal in the downward trend of the Nifty 50 until it surpasses its current 20-hour moving average of 23383 points, Jay Vora, senior technical and derivatives analyst at Indiacharts, said. Until then, the trend will remain bearish, and every rally will get sold in, he said. "We are somewhat getting into an oversold zone, especially in the short term... Maybe, a short-term bottom formation can happen somewhere between 22500-22800 (points)", he said.

Latest data from the US sparked bets that the Federal Reserve could keep key rates unchanged for a prolonged period.

According to non-farm payroll data released Friday, 256,000 jobs were added in the US in December, way higher than expectations of 155,000. The unemployment rate in the US also fell to 4.1% compared to the expectations of it remaining steady at 4.2%. With a resilient economy, the Fed is now expected to keep rates unchanged for at least four upcoming monetary policy meetings till June, as per the CME FedWatch.

Meanwhile, the sharp depreciation of the rupee and the rise in crude oil prices also dented sentiment.

The rupee fell the most in nearly 2 years and ended at a record closing low of 86.5750 to the dollar on Monday.

The price of Brent Crude oil futures crossed $81 per barrel on the Intercontinental Exchange on Monday after the US imposed sanctions against Russia's oil industry.

For the Nifty 50 options expiring Thursday, the highest open interest addition was at the 23300 strike price on the call side and 22100 points on the put side. The contract with the highest open interest was at the 26500 strike price in call options and 22000 points in put options.

The January futures contract of the Nifty 50 closed at 23168.05 points, which was at a premium of 82.10 points to the spot index. Open interest in the contract rose nearly 4% to 14.07 million, according to provisional data.

--Nifty 50 Jan closed at 23168.05, down 332.60 points

--Nifty 50 Feb closed at 23298.80, down 341.35 points; 212.85-point premium to spot index

--Nifty 50 Mar closed at 23459.00, down 338.55 points; 373.05-point premium to spot index
 

HDFC Bank, Reliance Industries. ICICI Bank, Infosys, State Bank of India, HCL Technologies, Axis Bank, Tata Consultancy Services, IndusInd Bank, Coforge, Tata Motors, and Avenue Supermarts were the most actively traded underlying stocks on Monday.  End

US$1 = INR 86.5750

Edited by Saji George Titus

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