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Informist, Monday, Dec. 22, 2025

 

By Simran Rede

 

MUMBAI – Traders aggressively sold out-of-the-money put contracts of Nifty 50 derivatives ahead of the expiry of weekly contracts Tuesday. This has opened the path for the headline index to hit a new record high in the near term after it rose sharply Monday to close above 26100 points after a gap of 10 trading sessions, analysts said. Premiums on out-of-the-money call options of the Nifty 50 expiring Tuesday jumped multifold while those on some put strikes fell 73-84%.

 

The 50-stock index is expected to test new highs Tuesday given positive domestic and global cues. Key support for equities has come from the currency market, where the rupee has strengthened against the dollar. At the same time, foreign institutional investors turned net buyers for the third session running, adding to the positive momentum in the domestic equity market.

 

The market rally is also driven by strong expectations of a rate cut in the US, which has kept the bullish sentiment intact, according to analysts. Participants await some key US economic data, including new home sales, the core Personal Consumption Expenditures Price Index, and weekly jobless claims, which will provide crucial triggers for the market.

 

In addition, appreciation of the Indian currency against the dollar has offered support. Monday, the rupee fell against the dollar as banks persistently bought the greenback on behalf of oil marketing companies. The rupee started the day lower against the dollar as the companies rushed to stock up on crude oil after reports that the US was still pursuing a third oil tanker near Venezuela Sunday, dealers said. The US had intercepted oil vessels Friday, too.

 

"Even though oil prices are not very high, people are scared they will shoot up if anything escalates," a dealer at a state-owned bank said. The February futures contract of Brent Crude traded on the Intercontinental Exchange rose for the fourth consecutive session Monday. At 1743 IST, the contract was 2% higher at $61.70 per barrel.

 

The India VIX has weakened sharply over the past four sessions, marking its lowest closing level on a weekly basis. Considering the settlement of monthly contracts, analysts believe the market's fear gauge may see an uptick. "The up move in India VIX may be driven by FII's short covering in the index," ICICI Direct said in a report.

 

Considering renewed FII buying, the brokerage expects a broader recovery in the markets. Momentum may be seen if the Nifty 50 is able to hold above 26200 points. If, however, the index fails to move beyond this level, it may remain in a range with major support pegged near 25700 points. "Despite the short covering, FIIs are still heavily long in put options as the net long in put options have remained near 220,000 contracts," the broking firm said.

 

Monday, the Nifty 50 closed at 26172.40 points, up 206.00 points or 0.8%. The index is expected to find immediate support around 26050-25980 points and resistance around 26250–26325 levels. In the options chain of the 50-stock index, premiums on call strikes 26200-26400 expiring Tuesday rose 28-191% and those on 26150-26000 put contracts fell 73-84%. The highest addition of open interest was at 26150 call and 26100 put. The maximum concentration of open interest was at the 26200 call and 26100 put.

 

--Nifty 50 December closed at 26201.40, up 171.40 points; 29.00-point premium to the spot index
--Nifty 50 January closed at 26382.00, up 192.00 points; 209.60-point premium to the spot index
--Nifty 50 February closed at 26521.00, up 189.50 points; 348.60-point premium to the spot index

 

Infosys, Shriram Finance, Cholamandalam Investment and Finance Co., Axis Bank, Multi Commodity Exchange of India, Eternal, Bharti Airtel, Vodafone Idea, ICICI Bank, HDFC Bank, Reliance Industries, BSE, Dixon Technologies (India), Vedanta, Hindalco Industries, Kotak Mahindra Bank, Hindustan Zinc, and Adani Enterprises were the most actively traded underlying stocks Monday.  End

 

Edited by Rajeev Pai

 

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