The NSE Nifty 50 Index declined for the first time in seven sessions on Thursday. Not only did foreign investors sell positions bought earlier but also took fresh short positions in index futures.
Nifty's April futures open interest declined 3 percent reflecting unwinding of long positions whereas fresh short positions were taken in NSE Nifty Bank Index's April futures where open interest gained over 4.5 percent. Foreign investors sold index futures worth Rs 928 crore where 9,263 index futures contracts were unwound.
The India Volatility Index (VIX) fell 2.2 percent to 11.29 after the announcement Reserve Bank of India's policy statement on Thursday. This led to a contraction of option premiums, indicating that traders anticipate less volatility in the near-term.
Nifty's 9,100 put option saw maximum accumulation followed by the 9,300 call. Maximum open interest lies with 9,000 put and the 9,500 call indicating a near-term range for the Nifty. As a hedge, foreign investors bought 8,619 index call contracts and 734 index put contracts on a net basis.
Metal companies including Tata Steel Ltd. saw buying whereas Hindalco Industries Ltd. saw selling in their April futures contracts with an increase in their respective open interest.
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