Nifty Rebounds As Traders Cover Short Positions
Shorts Covered As Nifty Moves Back Above 8,750
Major Indian equity benchmarks advanced on Thursday as investors bought shares of beaten down automakers and healthcare firms. The Nifty 50 index gained 0.6 percent, while its February futures open interest declined 1.9 percent on account of short covering ahead of next week’s expiry.
The Nifty Bank index, similarly, saw covering of short positions with its futures open interest dropping by around 4 percent. Foreign institutional investors bought index futures worth Rs 103 crore on a net basis.
The India Volatility Index fell 3.4 percent to 13.7 reflecting contraction in option premiums. Ordinarily, this means traders expect range-bound trade for indices in the near-term. Maximum open interest remained with 8,500 put and the 9,000 call, which broadly indicates a near-term range for the Nifty.
FIIs bought 4,675 index calls and unwound 2,794 index puts on a net basis.
