Stock Market: War of option writers send Nifty soaring
Coal India
By S Jha
New Delhi, September 7: The fear of the US Federal Reserve once more resorting to hike rate is now gripping the Wall Street. Dollar is strengthening and rupee has hit an all-time low. Yet, the stock market indices went soaring in the second half of the day, which also marked an expiry of the option contract for Nifty.
Bank Nifty had already the monkey of weekly option expiry off yesterday, with HDFC Bank keeping the index safe. With almost three hours for the bells to ring, Nifty was setting up for an intense tussle among the call and put option sellers. The 19600 put and call levels were written too aggressively. “Call open interest stood at 3,18,53,650, while the put open interest was placed at 4,86,13,350,” alerted Kolkata-based Amit Seth in his Telegram channel, warning that one side was poised to be thrashed as the watch ticked away for the weekly Nifty expiry.
Nifty was firming up strong above 19600 level and suddenly there was a gust that blew away the call option seller at the 19600 level, as Nifty blasted above 19700 level within a few minutes. The consequent short covering was intense, and Nifty finally settled at 19727 level, which according to chartists is a too bullish. Bank Nifty too was in its zone, with the front liners leading the show.
Indices have been on furious run, reclaiming the lost levels and racing fast towards the last high of 19950, seen a few months back. But the global cues may not give enough to cheer for the bulls, as the Chinese Yuan is now at a multi-year low against dollar. The Chinese economy is contracting, which may have implications for the global economy. At the same time, the strengthening US economy is souring the spirits of investors who fear that the Federal Reserve may further stock with hawkish stance.
Coal India was trending on Thursday on the back of the stocks of coals dipping with thermal power stations, while the power demands are breaking all records. Coal India in the last bull run in similar situation last year had almost kissed the level of Rs 300.
At the Raisina Hills, we have been regularly updating the readers to be watchful of Larsen and Toubro, the most underrated scrip, which has a robust construction and defence portfolio. It has now decisively broken out and trending up above Rs 2800 level, which is its all-time high.
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