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F&O Data Indicates Big Crack in Nifty; ITC, Lupin in Focus

The Sensex and Nifty ended lower on Thursday tracking the fall in rupee. The Sensex fell 324 points to close at 27,608, while the 50-shares Nifty ended below the crucial psychological level of 8,400.
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F&O Data Indicates Big Crack in Nifty; ITC, Lupin in Focus
The Sensex and Nifty ended lower on Thursday tracking the fall in rupee. The Sensex fell 324 points to close at 27,608, while the 50-shares Nifty ended below the crucial psychological level of 8,400.

Change in options open interests (outstanding positions) on Thursday indicates further weakness in markets on Friday. Nifty puts of 8,400 strike witnessed maximum reduction of open interest (OI) followed by 8,500 and 8,300 strike puts. Reduction in OI of the above puts indicates that big traders- option sellers - believe that Nifty is unlikely to hold 8,300-8,400 level by expiry.

Likewise, 8,500 strike call options added maximum OI of 17 lakh share, which indicates that big traders expect Nifty not to cross 8,500 by expiry.

Total open interest in Nifty puts fell by 24.8 lakh shares, while open interest in calls increased by 60.1 lakh share, pushing the put call ratio (PCR) lower to 0.92 from 1.04 on Wednesday. Although the magnitude of fall in PCR is small, but this indicates that bulls are changing their stance and market is unlikely to get short-covering support in case of big fall.

Meanwhile, the India VIX (volatility index) closed 1.77 per cent higher at 16.975, indicating increase in anticipated volatility in the near future.

Among the Nifty-stocks ITC, Lupin and Dr. Reddy's Lab witnessed increase in bullish bets as these stocks gained on Thursday along with open interest increase. Meanwhile, Yes Bank, Cairn India and Punjab National Bank will be in focus on Friday as these stocks saw increase in bearish bets- OI of these stocks increased along with steep cut in their prices.

Among non-Nifty stocks TVS Motor and M&M Financial Services saw increase in bullish bets and JSPL witnessed addition in bearish bets. OI in Amtek Auto, which fell around 50 per cent in last two trading sessions, came down by 9.72 lakh shares on Thursday.

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