The Hindu Business Line : Heavy short-covering seen on Nifty future

Turnover improved to Rs 57,532.76 crore in the F&O segment on Wednesday, against Tuesday’s turnover of Rs 47,969.8 crore. The Nifty July future closed at 4064.25, a discount of about 29.1 points over spot close. The discount was steep at around 65 points in the last few days. The discount got narrowed down sharply on account heavy short-covering in index futures as well as index heavyweight stock futures. The Nifty July future shed about 5 per cent in open interest positions, indicating short covering. Among the put options, 3700 and 3800 strikes were the most active and in the calls, 4000 and 4100 strikes remained the most active.

The accumulation in 3700 put suggests further downside. The Nifty 4100 call shed open interest, indicating resistance at that level.

Stock futures

Almost all the stock futures added open interest positions.

However, DLF which announced buyback plans, shed open interest positions and ended in discount at Rs 420.85 against the spot close of Rs 423.45. Cost-of-carry also remained negative pointing negative outlook for the counter.

FII activity

Foreign institutional investors bought heavily in F&O segment on Wednesday; they were net buyers to the tune of Rs 1,687 crore.

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