Options data see Nifty at 4900-5200

Markets opened strong, following up on Friday’s smart recovery and traded firm throughout the day, with the Nifty managing to stay above the 5000-mark.

Nifty futures ended the day on a slight discount of around three points to the index with an open interest reduction to the tune of 6.94 lakh shares to 2.59-crore outstanding now. The December series put-call ratio increased to 1.55 from 1.43 the previous day, while Nifty IVs continued to remain low in early 20s. On the Nifty options front, further addition was witnessed in Dec 5200 strike calls and December 4900 strike puts indicating the importance of these two levels. Thus, the options data continue to suggest a range of 4900 to 5200 on the Nifty.

On a stock specific basis, MSCI India weightage changes which got effective on today’s close, dominated good part of trading. This saw smart gains with huge volumes in HDIL, Suzlon, Tata Steel, JP Associates and Tata Power where weightages were being hiked in MSCI India. On the other hand, PowerGrid closed lower with heavy volumes even in a strong market on the back of deletion from MSCI India.

(The writer is a derivatives analyst with Ambit Capital)