Informist, Wednesday, Oct 6, 2021

By Joe Milton

MUMBAI – Weakness in global markets due to inflationary concerns led to profit booking in Indian equities, and the Nifty 50 index ended 1% lower. The decline prompted traders to add fresh short positions in the derivative segment of the index. 

Open interest in the October futures of Nifty 50 index surged 11.1% to 13.4 mln as traders initiated short positions. In the spot market, the 50-stock index fell 1% and closed at 17646 points, after touching an intraday low of 17613.15 points. 

If the weakness persists, the Nifty 50 index may retest 17500 points, said Rajesh Bhosale, technical and derivative analyst at Angel One. 

In the options segment of the headline index, call writers were active across 17700-18000 strike price as the premium fell sharply. 

If Nifty 50 manages to sustain above 17600 points, one can expect a swift pullback and now good resistance is formed near 17700-17770 points zone where again some sort of profit taking can be witnessed, said Rohit Singre, senior technical analyst at LKP Securities.

On stock specific front, Deepak Nitrite surged nearly 10% and touched its all-time high of 2,930 rupees as the price of some raw materials have surged.

The surge in the spot market price prompted traders to add long positions in the October futures of the stock as the open interest in the contract surged 12.3% to 2.8 mln. 

But, Deepak Nitrite is in highly overbought zone, and one should avoid initiating any fresh long positions at current levels, said Bhosale. One may look to re-enter the stock if it corrects to 2,600-rupee levels, he added. Shares of Deepak Nitrite closed at 2,886.80 rupees, up 8.1%. 

Shares of Oil and Natural Gas Corp extended Tuesday's gain as Brent Crude Oil prices remained elevated due to supply crunch. Investors placed their bet on the stock as high oil prices would boost the net realisation per barrel for upstream companies. 

On bullish outlook, traders initiated long positions in the October futures of ONGC as the open interest in the contract soared 22.4% to 66.8 mln on hope of more gains. 

Analysts belive the oil prices to stay elevated for the remainder of 2021, and shares of ONGC is expected to touch 185-190 rupees in the near-term.   

Today, shares of ONGC was the top gainer among Nifty 50 constituents as it ended 2.7% higher at 168.10 rupees. 

-–Nifty 50 Oct ended at 17611, down 218.75 points; 35-point discount to spot index

-–Nifty 50 Nov ended at 17649, down 212.35 points; 3-point premium to spot index

-–Nifty 50 Dec ended at 17687.90, down 208.60 points; 41.90-point premium to spot index

Total turnover in the futures and options segment of NSE was 80 trln rupees today compared with 44.45 trln rupees on Tuesday.  

The turnover in index options was about 76.4 trln rupees compared with 41.21 trln rupees in the previous session. The total premium turnover of index and stock options was 313.74 bln rupees compared with 226.9 bln rupees Tuesday. 

Indian Railway Catering and Tourism Corp, HDFC Bank, Reliance Industries, Tata Steel, Tata Power, Deepak Nitrite, Bajaj Finance, State Bank of India, Tata Chemical, Oil and Natural Gas Corp, ICICI Bank, and Tata Motors  were the other most actively traded stocks today. End

Edited by Arshad Hussain

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