India’s benchmark gauge of option costs dropped the most in three weeks as the CNX Nifty index declined for a seventh straight day.
The India VIX Index slid 4.6 percent to 18.01 at the close in Mumbai, its steepest loss since May 18. The 50-stock Nifty index retreated 0.3 percent to 8,022.40. Global investors bought $54.7 million of index options on Monday, a fifth day of net purchases, while they sold $31.3 million of Nifty index futures, according to data compiled by Bloomberg.
The Nifty has decreased 4.9 percent this month after central bank Governor Raghuram Rajan said he’d assess the progress of monsoon rains before adding to three interest-rate cuts this year. Tuesday’s stock losses came as the MSCI Emerging Markets Index fell for a 12th day, its longest streak of declines since 1990, amid deepening concern that higher U.S. interest rates will curb demand for riskier assets.
“Traders are playing it safe and are avoiding taking big bets,” Nilesh Dedhia, a Mumbai-based director at Vidhi Wealth Management Ltd., which oversees about $236 million in assets, said in a phone interview. “The bulls and bears are fighting within a narrow band of 8,000 to 8,200 for the Nifty.”
Nifty call options with a strike price of 8,500 and 8,000 puts were the most popular by the total number of outstanding contracts. Open interest in Nifty options dropped to 4.74 million, compared with a 20-day average of 4.77 million, data compiled by Bloomberg show. CNX Nifty index futures for June delivery lost 0.3 percent to 8,018.55.