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Informist, Wednesday, Jan. 29, 2025

 

By Anjana Therese Antony

 

MUMBAI – Ahead of the monthly expiry of futures and options contracts of the Nifty 50 on Thursday, traders aggressively added long positions in the derivatives chain of the index, hinting at near-term bullishness. Premiums on deep out-of-the-money options contracts expiring Thursday and next week declined sharply, while those on call strikes, which are 200-300 points higher than the spot level, increased. Long positions were also added in the February and March series of the index, while traders exited some positions from the January futures expiring Thursday.

 

"For any sustainable recovery, it (Nifty 50) needs to close above 23400-23450 zone. Till then, it will most likely to move sideways, with a positive bias," Vipin Kumar, senior technical and derivatives analyst at Globe Capital Market, said. "After nearly four months, I am shifting my bias to sideways-to-positive from negative (earlier)," Kumar said. 

 

The Nifty 50 Wednesday closed 0.9% higher at 23163.10 points and the BSE Sensex ended 0.8% higher at 76532.96 points. Though the Indian equity market closed higher for the second consecutive session, analysts said sharp gains are not anticipated, at least not ahead of the Union Budget.

 

Premiums on 23150-23400 call options expiring Thursday rose 148-202% and those on 23100-22500 put strikes declined 43-64%. The maximum open interest addition was at 23150-point call and 22500-point put options. The futures contract also closed sharply higher. Open interest in the February series rose 25% to 13.92 million and that in the March series increased 5.7% to more than 699,000.

 

Analysts said the market has also factored in status quo in interest rates by the US Federal Reserve this time, after cutting it by a total of 100 basis points in the last three meetings. However, investors will closely watch out for US Fed Chair Jerome Powell's comments on the future interest rate trajectory.

 

There are also some worries about the persistent selling pressure in the cash market from foreign investors, who have also been holding record short positions in index futures. Their long-short ratio has increased to 25% from 20?rlier. On Tuesday, FIIs added 4,000 long positions in index futures and covered over 30,000 short positions.

 

--Nifty 50 Jan closed at 23176.90, up 199.20 points; 13.80-point premium to spot index

--Nifty 50 Feb closed at 23310.70, up 209.45 points; 147.60-point premium to spot index

--Nifty 50 Mar closed at 23455.50, up 207.40 points; 292.40-point premium to spot index

 

Reliance Industries, HDFC Bank, Maruti Suzuki India, State Bank of India, Tata Motors, ICICI Bank, Axis Bank, Bajaj Finance, Bharti Airtel, Infosys, Kotak Mahindra Bank, Punjab National Bank, Bajaj Auto, Mahindra & Mahindra, Tata Consultancy Services, TVS Motor Co., and Hindustan Aeronautics were the most actively traded underlying contracts.  End

 

Edited by Ashish Shirke

 

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