Bank Nifty sees huge shorting as fears of rising NPAs loom

MUMBAI: The Bank Nifty could move in an over 8% range, with a downward bias in the coming week, going by the heavy call selling in May 28 expiry options on Friday, reports Ram Sahgal.

The range for the index is 16580-18020, the provisional closing value of the 17300 straddle shows. Weakness in financials is underpinned by expectations of a surge in bad loans even as the RBI extended the moratorium on EMIs by another three months through August 31.

Open interest across F&O contracts of Bank Nifty rose by 65% to 649113 as the index’ underlying value fell 2.6% to 17279 on Friday. The near-month contract witnessed a jump of 33% in open interest as its price fell to 17286 a share (20 shares equal one lot), a negative indicator.


“Ever since index broke down below 18500, it has been a major underperformer,” said Amit Gupta, derivatives head, ICICI Securities.