Bank Nifty expiry today: Index erases early gains, 50,000 seen as crucial level for the market

Equity markets opened gap-up on Wednesday but saw choppy trade and failed to maintain the momentum. The benchmark indices - NSE NIFTY50 and BSE SENSEX - were trading higher by 1% at noon on Wednesday.

The Bank Nifty opened higher but erased early gains to trade higher by 0.30% at 49,890. As per the options market, the Bank Nifty index will face immediate resistance at the level of 50,000. Call options for the 50,000 strike price have an open interest of 65.79 lakh contracts while the change in open interest was at 46.21 lakh.

At the same time, the index will likely see strong support at the 49,500 level. Put options for the 49,500 strike price have an open interest of 47.96 lakh while the change in open interest stood at 33.21 lakh.

The max pain of Bank Nifty stood at the 50,000 level. The max pain theory indicates the level at which option sellers will likely see the least loss on expiry. However, the max pain level is dynamic and keeps shifting if the market moves significantly in one direction.

On the 15-minute timeframe, the Bank Nifty was trading below its 21-period and 50-period exponential moving averages (EMAs).

The put-call ratio (PCR) stood at 0.72 which indicates slight bullishness. The put-call ratio signifies the number of puts to the number of calls. It is noteworthy that the PCR ratio has gone as high as 1.85 and higher in cases of extreme upward market movements.

The India VIX crashed 9.28% to 17. The India VIX is an index that reflects the anticipated volatility in the markets over the next 30 days.

HDFC Bank, which constituted 28.38% of the index was trading higher by 1.30% on Wednesday. IDFC First Bank was up by 0.95% while IndusInd Bank saw losses of 2.34%. AU Bank was trading lower by 0.90%.