F&O Morning Update for 3 January 2023

Asian Markets Update @ 7:00 am

The SGX Nifty slumped 77 points from its previous close, suggesting a negative start for the Nifty50 today. Major Asian markets are also trading lower. Hong Kong's Hang Seng index dropped 1.7%, while China's SSE Composite declined 0.2%. Nikkei 225 in Japan was closed on account of a holiday.

Index Action

Nifty50
January Futures: 18,278 📈 ▲71 (+0.3%)
OI contracts: 2,13,763 (+0.4%)

The Nifty50 index started 2023 on a positive note and closed Monday's session 0.5% higher. The index gained confidence in the afternoon session after the release of a better-than-expected PMI reading, highlighting that the manufacturing activity rose to 57.8 in December 2022.

Except for Pharma (-0.3%), all the major sectoral indices closed in green. Metal index (+2.4%) advanced for the third day and hit a fresh all-time high, while Realty (+1.0%) extended its winning run and closed in green for the sixth day in a row.

Nifty50’s options contracts expiring on 5 January have sizable positions at 18,200 and 18,500 call options and 18,000 and 18,200 put options. 

As per options data and OI analysis, the broad range for the Nifty50 is between 17,500 and 18,600 levels. On the other hand, 18,000 and 18,400 are the critical levels to watch for the current week.

Bank Nifty
January Futures: 43,436 📈 ▲270 (+0.6%)
OI contracts: 87,564 (+0.8%)

After a positive start, the Bank Nifty index reclaimed the 43,000-mark on a closing basis and ended Monday's session 0.5% higher. However, the index faced selling pressure at higher levels and failed to cross Friday's high.

Among banking stocks, IDFC First Bank (+4%) and Bandhan Bank (+2.5%) were the top gainers, while Federal Bank (-0.9%) and State Bank of India (-0.2%) were the top losers.

Bank Nifty’s options contracts expiring on 5 January have sizable positions at 43,000 and 43,500 call options and 43,000 and 42,500 put options.

As per options data and OI analysis, the broad range for the Bank Nifty is between 42,200 and 44,000 levels. On the other hand, 42,900 and 43,600 are the critical levels to watch for the current week.

FII and DII Data**💰

The Foreign Institutional Investors (FIIs) sold shares worth ₹212 crore, while Domestic Institutional Investors (DIIs) purchased shares worth ₹743 crore in the cash market. In the derivatives market, FIIs sold index futures worth ₹716 crore and sold index options worth ₹1,379 crore. Further, they bought stock futures worth ₹519 crore and sold stock options worth ₹19 crore.

India VIX 

The India VIX, which measures the implied volatility of Nifty50 options, fell 1.2% to 14.69.

Stock Action📊

Long build-up was seen in Tata Steel, SAIL, Rain Industries, Hindustan Copper and Power Finance Corporation. 

Short build-up was seen in MCX, Asian Paints, Colgate-Palmolive, Marico and Ipca Labs.

*In Futures and Options or F&O, long build-up means an increase in Open Interest (OI) along with an increase in price, and short build-up means an increase in Open Interest (OI) along with a decrease in price.

**Source: nseindia.com. Cash market figures are provisional.