Informist, Thursday, Dec 7, 2023

By Padmini Dhruvaraj

MUMBAI – Investors sold both put and call options across the strike prices of the Nifty 50 contracts expiring on Dec 14 after the spot index fell today, snapping a seven-day gaining streak.

The benchmark Nifty 50 index opened lower tracking weakness in the global markets and ended 0.2% lower at 20901.15 points. "Markets finally snapped a seven-day winning streak as weak global cues fuelled selective profit-taking in domestic stocks after the recent upsurge," Prashanth Tapse, senior vice-president of research at Mehta Equities, said in a note.

Avdhut Bagkar, technical and derivatives analyst at StoxBox, said in his note that the Nifty 50 weekly options that expired today had a negative bias with the 20900 call strike and 20900 put strike attracting "energetic traction".

"The option activity was insinuating a strong move if the index had definitively crossed the 20940 mark," he said in the note. "Thus, going ahead, traders need to gauge a move over this barrier to enter a long trade."

Call options at the 21000 strike price expiring on Dec 14 saw the highest net change in open interest today with 2.64 mln new positions. The premium on the contract fell 21.4% to 111 rupees. Additionally, some aggressive call selling was seen at 21500, 21600, and 21700 strike prices.

On the put side, the 20900 strike price saw the second-highest open interest with the addition of 2.88 mln new contracts, while the premium on the contract declined 17.8% to 85 rupees. Some aggressive put selling was seen at 19000 and 20000 strike prices. The 20000 strike price contracts had the highest addition of open interest with 2.91 mln new positions.

Going forward, analysts pegged 20850 points as immediate support for the 50-stock index and 21000 points as the resistance. "The overbought reading in the index may result in further consolidation; however, the bias would remain on the positive side," said Ajit Mishra, senior vice-president of technical research at Religare Broking Ltd.

The December futures contract of the Nifty 50 closed at a premium of 132.70 points to the spot index today. Open interest in the contract rose 9.26% to 12.27 mln, according to provisional data.

--Nifty 50 Dec closed at 21033.85, down 5.45 points; 132.70-point premium to spot index

--Nifty 50 Jan closed at 21158.00, down 3.10 points; 256.85-point premium to spot index

--Nifty 50 Feb closed at 21258.00, up 0.10 points; 356.85-point premium to spot index

Maruti Suzuki, Tata Power, Reliance Industries, Adani Ports and Special Economic Zone, Power Grid Corp of India, NTPC, and Adani Enterprises were among the more actively traded underlying stocks.  End

Edited by Rajeev Pai

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