F&O Update for Tuesday, September 3, 2024:
Despite the NSE Nifty 50 index extending its winning streak to 13 consecutive days, the Nifty September futures experienced a decline, falling 0.1% to 25,340. This decrease was largely attributed to a significant drop in the Nifty futures premium, which plummeted from ₹141 to ₹61. Open interest (OI) for Nifty September futures increased marginally by 1.3% on Monday.
Conversely, Bank Nifty September futures remained relatively stable with a slight uptick in OI. However, the Bank Nifty futures premium also saw a sharp decline from ₹312 to ₹211.
Key Insights from Nifty and Bank Nifty Options Data:
Nifty Options Data: The Nifty options market has exhibited a bearish bias, with a higher volume of call writing compared to puts. This shift marks the end of a week-long bullish trend characterized by heavier put writing, according to Dhupesh Dhameja, Technical Analyst at SAMCO Securities. Significant open interest levels at the 25,000 Put (61.28 lakh contracts) and the 25,300 Call (66.42 lakh contracts) suggest strong resistance and caution in the market.
The Put-Call Ratio (PCR) has decreased from 1.27 on Friday to 0.96, indicating a predominance of call writers. This shift in the PCR, which had been rising throughout the week, underscores a cautious market outlook. The Max Pain Point, situated at 25,200, is a crucial level to watch for potential impacts on Nifty movement.
Bank Nifty Options Data: For Bank Nifty, significant open interest is observed at the 51,500 Call (39.33 lakh contracts) and the 51,000 Put (25.96 lakh contracts), with active trading around the 51,400-51,600 Calls and 51,200-51,100 Puts. The Put-Call Ratio (PCR) has slightly decreased from 0.88 on Friday to 0.85, reflecting a sideways to bearish sentiment. The Bank Nifty has been trading within a muted range of 51,500-51,000 over the past six sessions, with the Max Pain Point at 51,500 acting as a critical level for potential directional shifts.
FII and DII Trading Activity:
According to NSE data, Foreign Institutional Investors (FIIs) net sold 10,187 contracts of index futures on Monday, totaling ₹600.18 crore. They net sold 13,256 contracts of Nifty futures and 203 contracts of MidCap Nifty futures while purchasing 3,198 contracts of Bank Nifty futures. This marked the first time in six trading sessions that FIIs were net sellers of Nifty futures, possibly signaling profit-taking amidst the ongoing rally. As a result, the FIIs’ long-short ratio in index futures fell to 2.3:1, with FIIs holding approximately 5 long positions for every 2 short positions. FIIs’ long positions in index futures stood at 69.96% as of the latest data.
In contrast, Domestic Institutional Investors (DIIs) net bought 18,347 contracts of index futures, absorbing the FIIs’ sales. This has elevated the DIIs’ index futures long-short ratio to its highest level since June 19, reaching 0.77, with net index longs at 43.48%. Retail traders also reduced some of their short positions, as indicated by a rise in their long-short ratio to 0.67.
Bullish & Bearish Stocks:
Bullish Stocks: Gujarat Gas, the top gainer among F&O stocks with an 11% rise on Monday, saw a modest 1% increase in open interest (OI). GNFC also added long positions, advancing 1.4% along with a 5.3% rise in OI.
Bearish Stocks: Hindustan Copper and Indraprastha Gas saw increased short positions, declining 3.8% and 1%, respectively, accompanied by increases in OI of 16.8% and 11.1%.
Stocks in F&O Ban Period:
Balrampur Chini is the only stock in the futures & options ban period on Tuesday.
