F&O Manual | Nifty reclaims 20K on derivatives settlement boost, MSCI inflows

The Indian market was trading higher on November 29 morning, as the equity benchmark Nifty climbed above 20,000 after more than two months. Positive global cues fuelled by hopes that the US central bank had concluded its rate-hiking cycle and gains in heavyweights lifted sentiment.

At 11.14 am, the Sensex was up 393.44 points, or 0.6 percent, at 66,568, and the Nifty was up 114.3 points, or 0.57 percent, at 20,004. About 1,954 shares advanced, 948 declined, and 130 were unchanged.

All sectors were trading in the green, with information technology, oil & gas, and power rising a percent each. BSE midcap and smallcap indices were up 0.5 percent each.

“Derivatives monthly settlement, fresh inflows due to MSCI rebalancing, and short covering are helping markets to find momentum. We should see continued movement this week,” Raj Deepak Singh, Head of Derivatives at ICICI Securities, said.

Bars in green show change in open interest (OI) for put options while bars in red show change in call option OI

The Options data suggests that put writers will dominant with heavy put writing at 20,000. “The market is just witnessing what was due for long. The way the market was holding up above 19,750, clearly indicated that it was up for another rally after a 1,000-point up move from 18,850,” Sheersham Gupta, director and senior technical analyst, Rupeezy, said.
It would not be a surprise if the Nifty crosses the all-time high resistance of 20,200 in the December series itself, he added.
“But the interesting thing is that the Nifty will be at an all-time high even when the Bank Nifty is down by about 5 percent. This rally being led by the IT sector clearly indicates the market is anticipating the days of rate hikes may soon be behind,” Gupta added

Long build up positions for the day at 10.38 am on Nov 29

Among individual stocks a long build-up was seen in Muthoot Finance, Manappuram Finance and BirlaSoft, while Zeel, NMDC and Siemens were seeing a short buildup.

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