Nifty index futures closed 1.33% lower at 10711.3 on Thursday. Sep month Nifty open interest rose by 4.7 lakh shares indicated short build ups in the markets. Premium continued to fall; stood at 6.5 points against previous day's 14.8 points. Covering of Put longs in the ATM and OTM strikes helped the PCR declined to 0.83 from Thursday's 1.02. Nifty volatility index closed at 15.5 against last day's 15.3525.
FIIs reduced longs in index futures
Expiry of the last weekly contract of the month prompted heavy covering and liquidation yesterday. Put shorts fell by 24.3 percent, or 33541 contracts, index future longs fell by 17.15%, or 12,772 contracts, and index call longs fell 14%, or 26,101 contracts. So, with over 72,000 contracts logging out from positive direction, Nifty obviously was under serious pressure, taking the index close to the August lows. The additions to the monthly contract have all come along the bearish side, with increase in OI seen in call shorts and put longs. Meanwhile, 41325 put longs were also seen liquidated yesterday.
Nifty Outlook: Expect sharp moves.
Though Nifty’s sharp fall yesterday rings in caution, the massive activity centred around expiry related exits yesterday, has freed up the option spectrum, allowing bullish bets a fair chance today to defend the 10637.15 level, or prompt a short covering.
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