Informist, Monday, Apr 11, 2022

By Joe Milton

MUMBAI – The Nifty 50 index ended its volatile session in red today. Movement in the index will be range-bound in the coming sessions, suggests derivatives data, as investors may avoid aggressive bets due to fewer trading sessions this week.   

Equity markets will remain closed on Thursday on account of Mahavir Jayanti and Ambedkar Jayanti. Markets will be closed on Friday as well on account of Good Friday. 

In the put options of the Nifty 50 expiring on Wednesday, writers were active at the 17700 strike price in the first half of the session today, as the headline index came off its lows. 
 

However, selling pressure at higher levels dragged the benchmark index in the last hour of trading, with the 17000 strike price in the put options taking prominence. 

The highest open interest in the put option was at the 17000 strike price, followed by strike prices of 17700 and 17500. 

The Nifty 50 has strong support at 17550 points and may face resistance at 17900-18000 points, said Ratnesh Goyal, senior technical and derivative analyst at Arihant Capital Markets. 

Today, the 50-stock index closed 0.6% lower at 17674.95 points after touching an intra-day low of 17650.95 points. 

The open interest in the April futures of the Nifty 50 fell 5.2% to 9.5 mln, as some traders unwound their long positions.

Investors booked profits in information technology companies even as the Nifty IT index remained in a corrective phase. The index closed 1.4% lower at 34895.90 points. 

Short formations are seen in some heavyweight IT stocks ahead of the release of Jan-Mar earnings. Hence, some underperformance can be seen in the IT space in the near term, said Ruchit Jain, lead research, 5paisa.com.

The open interest in the April futures of HCL Technologies, Wipro and Infosys was down 4-10%. These stocks closed 2-3% lower in the spot market. 

The weakness in financial stocks weighed on the headline index, with HDFC Bank, Axis Bank and IndusInd Bank closing 0.5-1.5% lower. 

The Nifty Bank index closed 0.4% lower at 37613.80 points after touching the day's low of 37524.45 points. 

In the call option segment of Nifty Bank expiring on Wednesday, the highest open interest was at the 38000 strike price. Analysts expect the index to face resistance at this level. 

The next leg of upmove in the Nifty Bank index can be expected once it surpasses 38200 points, analysts said. The index is expected to find immediate support at around 37500 points. 

Accordingly, the highest open interest in the put option segment of Nifty Bank expiring on Wednesday was at the 37500 strike price. 

On stock-specific front, shares of Grasim Industries witnessed a breakout, with over 8% gains in two sessions. The gains were supported by strong volumes. 

Today, the stock closed 2.8% higher at 1,820.15 rupees. 

Options data of Grasim Industries suggests that the stock has the potential to inch higher, as the highest open interest in the call option segment of the stock was at the 1,900-rupee strike price. 

--Nifty 50 Apr ended at 17728.05, down 150.70 points; 53.10-point premium to spot index

--Nifty 50 May ended at 17770.50, down 153.55 points; 95.55-point premium to spot index

--Nifty 50 Jun ended at 17814.35, down 150.40 points; 139.40-point premium to spot index

The total turnover in the futures and options segments of the National Stock Exchange was 73.1 trln rupees compared with 62.56 trln rupees on Friday.

The turnover in index options was 70 trln rupees as against 59.11 trln rupees in the previous session. The total premium turnover of the index and stock options was 343.3 bln rupees compared with 383.82 bln rupees on Friday.

The most actively traded underlying stocks were Infosys, ITC, HDFC Bank, Reliance Industries, Tata Power, Tata Consultancy Services, ICICI Bank, Ambuja Cements and Tata Motors. End

Edited by Namrata Rao

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