Foreign Funds Tread With Caution As Nifty Traders Near Record
India VIX Declines As Major Indices Consolidate
Lack of meaningful triggers and a stock market trading near record highs has turned foreign funds cautious on Indian equities.
While the Nifty 50 index continued to consolidate on Friday, foreign funds swapped their long positions in the index futures with fresh shorts. They also added long positions in the index put options.
The Nifty’s July futures open interest was little changed. Likewise the case for the Nifty Bank futures.
Foreign investors sold index futures worth Rs 761 crore on a net basis with long positions in index puts of 11,447 contracts and a much smaller 1,163 index call contracts on a net basis.
The India volatility index (VIX) declined 1 percent, reflecting contraction in option premiums. The Nifty put-call ratio, which is the total open interest in Nifty put options to that of call options, fell to 1.29 from 1.3. This measure reflects the number of calls written in comparison to puts in the Nifty.
Among the most active options, the 9,700 and 9,800 call options saw most amount of writing. Maximum open interest remains with the 9,500 put and the 9,700 call. This can be seen as the range within which traders expect the Nifty to move in the near-term.
Active Stock Futures
- Lupin, which was the Nifty top gainer, shed 6% in OI reflecting short covering
- Reliance Industries advanced 3.4% adding 12% in OI adding fresh longs
- Ambuja Cement saw the highest change in OI, dropped 14% towards fresh shorts
- TVS Motor Co witnessed fresh longs with OI up 13%
- Oriental Bank’s OI increased 9% reflecting fresh shorts
- HDIL saw longs unwind with OI dropping 6% (still in ban)
F&O Ban List
- HDIL
- Indiabulls Real Estate
- JP Associates
- JSW Energy
- Ujjivan Financial
Being in the F&O ban list means that no new positions will be allowed to taken in the futures contracts of these securities until earlier positions are unwound below the threshold limit.