When you witness a fall like the one on Thursday, there are multiple theories that would float around as to what actually led to the fall. The Nifty, which opened higher, fell over 450 points from the highs of the day to end with losses of nearly 2% during its monthly expiry session.
It was the same 24,350 mark that the index continues to find resistance at and Thursday was no different. The index made an intraday high of 24,345 during the first hour of the expiry session and reversed sharply post that.
Some would attribute the fall to the escalation of geopolitical tensions between Russia and Ukraine, some would say it was the expiry related volatility at play for the index, and some would call it routine retracement after a near-1,100-point recovery on the Nifty from last week’s low of 23,263. The reason may be either among the three, or a combination of the three, the bottomline was that the Nifty not only ended deep in the red, but also gave up the 24,000 mark on the downside, which was said to be a key near-term support.
The Nifty ended the November series with losses of close to 300 points courtesy Thursday’s fall. A dramatic reversal last week though, limited the damage, which at one point was close to 1,000 points. Thursday’s fall has also meant that the Nifty has nearly erased all the gains for the week and is barely managing to hold on to the green on a weekly basis. The index needs to close above 23,907 for a positive weekly close.
There will be no overnight cues from Wall Street as the markets are shut due to the thanksgiving holiday. What the street will notice though is a potential ceasefire violation between Israel and Lebanon, just 24 hours after being put into effect.
Foreign institutions were heavy net sellers in the cash market, selling everything they purchased during the last three trading sessions, including the MSCI rebalancing. Domestic institutions remained net buyers.
The Nifty Bank had a very wide 1,000 point range in Thursday’s trading session. The index retested levels of 52,800 on the upside, before a reversal and selling pressure in stocks like HDFC Bank, which earlier made a record high, and ICICI Bank led to the index testing levels of 51,750 on the downside as well. By close, the Nifty Bank closed below the mark of 52,000, just over 150 points off the lows of the session.
What Are The F&O Cues Indicating?
Nifty 50’s December futures added 68% or 47.7 lakh shares in Open Interest on Thursday. They are now trading at a premium of 201.1 points. On the other hand, Nifty Bank’s December futures added 12% or 2.2 lakh shares in Open Interest on Thursday. Nifty 50’s Put-Call Ratio is now at 0.95 from 1.12 earlier.
No stocks are in the F&O ban.
Nifty 50 on the Call side for December 5 expiry:
On the Call side, the Nifty 50 strikes between 24,000 and 24,500 have seen Open Interest addition for next Thursday’s weekly expiry.
Nifty 50 on the Put side for December 5 expiry:
On the Put side, the Nifty 50 strikes between 23,300 to 24,100 saw Open Interest addition for next Thursday’s weekly expiry.