Broader indices outshine; Muthoot Finance glitters, 1500 CE option gains over 200 per cent

Market Update at 3:05 PM:The Indian benchmark indices have staged a smart recovery from the day’s low in the last half an hour. Nifty has recovered almost 100 points from the day’s low and reclaimed the 15,550 mark.  

Reliance Industries and State Bank of India (SBI) have aided strong recovery as they combinedly contributed nearly 22 points to Nifty’s kitty. However, the real show stopper of today’s session is the broader indices as Nifty Midcap 100 & Smallcap 100 have surged over a per cent. As a result of this, the advance-decline ratio is strong as there are three advancers against one decliner. 

Among the stock options, Muthoot Finance Call option of 1,560, 1,460, and 1,500 strike price have delivered more than 200 per cent gains in a single trading session.  

Market update at 11:50 AM: Indian markets extended their losses and were seen trading near the lowest point of the day. Nifty has slipped below its significant level of 15,500 while Sensex tumbled below the 51,600 mark. 

Despite weakness in the frontline indices, the broader markets were seen trading in green with Nifty Midcap 100 and Smallcap 100 gaining 0.95 per cent & 0.90 per cent, respectively; thereby, outperforming the benchmark indices with a wide margin.   

The advance-decline ratio is in favour of advancers. Among the sectoral indices, Nifty Realty, Nifty Metal & Nifty PSU Bank have gained more than 1 per cent each while Nifty IT is down by around 1.3 per cent.   

In the Futures segment, the top losers are ITC, followed by LTI, Tech Mahindra, and MindTree. On the other hand, the top gainers are Gujarat Gas, Adani Enterprises, Lupin, and Glenmark.   

Market Update at 10:18 AM: Nifty has been under selling pressure since the opening bell and selling pressure has just exacerbated as the day progressed. Nifty slipped below its prior bar low and it's currently, hovering around the 15,500 mark. Adani Ports, Tata Steel, JSW Steel, Reliance, and Vedanta Ltd were the top contributors in Nifty. 

Talking about the sectoral performance, a majority of the sectoral indices were seen trading in the green, led by Nifty Metal & Realty as both the sectoral indices were trading up by over 1 per cent. On the other hand, Nifty IT was the top loser as it has declined by 1.31 per cent.  

Pre-Market update: Nifty snapped its seven day’s winning streak on Tuesday as it slipped about 135 points from the day’s high to end with a modest loss of 0.05 per cent.    

Nifty started the day on a positive day i.e. above the 15,600 mark and extended its gains to mark a fresh all-time high of 15,660.75. However, profit-booking emerged at higher levels, and it went onto mark the low of 15,528.30 levels but in the end, it settled at 15,574.85. The advance-decline ratio was in favour of decliners.     

The price action of the day formed a spinning top, but Nifty continued its formation of higher highs of the last eight sessions. The formation of the spinning top should be considered as Nifty is taking a breather after a strong uptrend. Going ahead, the level of 15,660.75 (Tuesday’s session high) is likely to act as a resistance in the near term. On the downside, the zone of 15.430-15,500 is likely to act as an immediate support level and as long as Nifty stays above this region, the buying-on-dips strategy should be adopted. For traders, who are considering trading contra, we would advise waiting until Nifty closes below the prior bar low.    

The market breadth remained weak, and volatility spiked nearly 3 per cent, which is a cause of concern. Hence, we would advise traders to avoid aggressive bets as one should adhere to proper risk management.