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Positive global signals could support Nifty 50 during weekly options expiration

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The Nifty 50 gave up half of the two-day gains made last Friday and during this Monday’s trading session. The bulls tried their best but could not prevent the index from closing below the 19,000 mark mid-week.


It’s not as if corporate earnings have been disappointing. Most of them met or exceeded expectations, but the market did not have access to a major trigger to go higher. The fact that the US Federal Reserve maintains its interest rates overnight and US markets react positively could well prove to be this trigger.

Foreign investors remained net sellers in the spot market, while domestic investors were buyers.

Morgan Stanley’s Ridham Desai says early trends point to analysts’ earnings estimates being beaten, although the market appears to remain cautious. “We continue to estimate earnings ahead of the Street and believe the Street will need to revise fiscal 2024 estimates upward,” he said.

Day High Weak Close
Friday 19,076.15 18,926.65 19,047.25
Monday 19,158.50 18,940 19,140.90
Tuesday 19,233.70 19,056.45 19,079.60
Wednesday 19,093.05 18,974.20 18,991.95

The Nifty 50 gained 280 points on Friday and Monday and fell by over 150 points in the last two trading sessions. Thursday will also be the weekly options expiration session for the Nifty 50.

Nagaraj Shetti of HDFC Securities believes that the short-term trend of the index continues to hold and he expects it to fall back towards the 200-DEMA of 18,850 before rebounding again from these levels. “Any intra-week rise from here may encounter resistance around 19,100 levels,” he said.

The Nifty 50 has formed a bearish candle on the daily charts which is largely negative, said Shrikant Chouhan of Kotak Securities. He expects a further uptrend only after the index crosses 19,050 and sustains above it, otherwise it may fall back to 18,950 levels.

With this recent two-day decline, the Nifty Bank has already fallen below last Friday’s closing level of 42,782. The index has lost almost 350 points over the last two sessions. The index is now down 1.2% for the year.

The index faced some weekly expiration-related volatility and fell to a low of 42,590 before reversing from those levels. However, the index fell another 145 points on Wednesday.

Immediate resistance for Nifty Bank lies at 43,000, where significant call-side open interest is present, said Kunal Shah of LKP Securities. A move above 43,000 could trigger a covering move towards 43,500. On the downside, support is at 42,400 and a close below which could intensify selling pressure.

What do F&O signals indicate?

November futures of Nifty 50 added 4.3% and 4.73 lakh shares in Open Interest. They are now trading at a premium of 71.1 points compared to 78.6 points previously. On the other hand, Nifty Bank’s November futures added 1.1% or 26,955 shares in Open Interest. The Put-Call ratio of Nifty 50 is now at 0.82 compared to 0.91 earlier.

GNFC is the only stock that continues to be on the F&O banned list.

Nifty 50 Call side for November 2 expiry:

For this Thursday’s weekly expiration, Nifty 50 calls between 19,000 and 19,150 have been added to the open interest. The 19,100 strike saw the highest open interest addition.

Strike Change of RO Prime
19,100 69.72 Lakh added 4:75 p.m.
19,050 50.05 Lakh added 31.05
19,000 49.79 Lakh added 51.75
19,150 34.3 Lakh added 8:55 a.m.

Nifty 50 on Put side for November 2 expiry:

For Thursday’s expiration, the Nifty 50 put strikes between 18,800 and 18,900 saw the highest open interest addition.

Strike Change of RO Prime
18,850 29.61 Lakh added 4:85 p.m.
18,900 21.3 Lakh added 28.1
18,800 22.56 Lakh added 9.7

Let’s take a look at stocks that added new long positions on Wednesday, meaning an increase in both price and open interest:

Action Price change Change of RO
Alkem Laboratories 0.15% 9.16%
Bajaj-Auto 0.56% 6.52%
Vodafone Idea 7.92% 5.86%
Vedanta 3.07% 4.20%
Sun Television 1.01% 3.93%

Let’s take a look at stocks that added new shorts on Wednesday, meaning a drop in price but an increase in open interest:

Action Price change Change of RO
JSPL -7.76% 14.65%
PFR housing financing -0.36% 12.06%
Gaz Indraprastha -0.47% 11.83%
ABB India -1.29% 10.08%
Max Financial Services -2.87% 9.44%

Here are the stocks to watch ahead of Thursday’s trading session:

  • Trusted Industries: Sources tell Bloomberg that the company plans to raise ₹15,000 crore through the sale of a local currency bond.
  • MotoCorp Heroes: Pawan Munjal volunteers to reduce his fixed salary by 20%. It took home ₹99.6 crore in FY2023, 18% more than the previous year.
  • MotoCorp Heroes: Net profit of ₹1,053.8 crore beat expectations of ₹977 crore. Revenue, EBITDA and margin all meet Street expectations. Revenue increased by 4.1% year-on-year, while margin increased by 270 basis points.
  • Brittany : Revenue of ₹4,433 crore, in line with estimates of ₹4,511 crore. Net profit was slightly higher while EBITDA and margin exceeded estimates. However, according to sources, September quarter volume growth stood at 0.2%, compared to a CNBC-TV18 poll of 2-3%.
  • Tata Steel: India EBITDA per tonne at ₹13,401, lower than poll of ₹14,530. Combined European EBITDA loss of $155 per tonne while the survey predicted a loss of $140 per tonne. Net debt increased to ₹77,032 crore. Reported a net loss of ₹6,196 crore for the quarter due to restructuring and other provisions worth ₹3,611 crore and provision for impairment of non-current assets worth ₹3,255 crore.
  • Sun Pharma: The company, during its earnings call, said it had repaid debt worth over ₹5,000 crore in the September quarter. Even if prescribing trends remain stable, Revlimid’s generic revenues will likely be episodic. Management expects Sun to benefit from a seasonal increase in specialty dermal products in the second half.
  • Eicher engines: Royal Enfield’s total sales for October rose 3% to 84,435 units, while exports fell 39% to 3,477 units.
  • Bajaj Finance: Issue 15.5 lakh warrants to Bajaj Finserv worth ₹1,188.9 crore.
  • GAIL: Signed a 15-year supply contract with BPCL for the supply of propane to its Usar petrochemical plant in Maharashtra. The estimated value of the contract would be ₹63,000 crore. During these 15 years, GAIL will purchase 600 MTPA of propane from BPCL’s LNG import facility at Uran.
  • Godrej Consumer Products: India volume growth in September quarter of 10%, while volume growth consolidated at 11% year-on-year. Net profit for the quarter was slightly below estimates, while other metrics were largely in line with expectations.
  • JK tire: Net profit of ₹242 crore compared to ₹51 crore last year. EBITDA doubles, while margin increases by more than 700 basis points. Revenue for the quarter increased by 3.8% year-on-year.
  • Kansai Nérolac: Net profit rises 56% for the September quarter to ₹177.2 crore, while revenue remains flat year-on-year. Operating profit or EBITDA increases by 37.1%, while margin increases by almost 400 basis points to 14%, compared to 10.3% last year.
  • What do the global signals indicate?

    Asian stocks opened higher after investors were reassured by the Federal Reserve’s fire and amid inflation data from South Korea.

    The Nikkei 225 opened up 1.2%, while the Topix also traded with gains of one percent.

    The Kospi is trading 1.6% higher after consumer prices in South Korea accelerated for the third consecutive month in October. The tech-heavy Kosdaq is trading with gains of 2.1%.

    Hang Seng futures also point to a stable start to the trading day.

    Overnight, all three Wall Street indexes finished higher. The Dow Jones gained more than 220 points, while the S&P 500 gained one percent, briefly crossing the 200-day moving average mark higher. The Nasdaq gained 1.6% ahead of Apple’s results later in the evening.

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