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Informist, Tuesday, Jun. 23, 2026

 

By Simran Rede

 

MUMBAI – A sharp sell-off in most Asian markets with the dollar index strengthening weighed on Indian equities. While a fall in crude oil prices provided some support for the Nifty 50 earlier in Tuesday's session, selling in information technology stocks eventually dragged the index down, which drove traders to add short bets in the options chain of the Nifty 50 derivatives.

 

Positioning in the monthly futures and options of the Nifty 50 suggests that market participants expect the benchmark index's movement to be volatile over the next seven days. Rollover of positions to the July series will add to the volatility in the market, in the backdrop of persisting geopolitical issues, a massive sell-off by foreign investors, and a weak rupee. The June series of Nifty futures will expire Jun. 30.

 

The market's volatility gauge, India VIX, remains above 12 points, which indicates moderate-to-high expected volatility for the Nifty 50 over the next 30 days. The gauge closed nearly 9% higher at 13.9425 Tuesday, signalling anxiety among investors.

 

Rising put-buying activity in strikes lower than the spot level underscores selling pressure, in addition to call writing at out-of-the-money contracts. The put-call ratio is 0.70-0.74, according to Nandish Shah, senior derivative and technical analyst at HDFC Securities. This reflects cautious market sentiment and a rise in call-based positioning, Dhupesh Dhameja, derivatives research analyst at SAMCO Securities, said in a note.

 

Traders wrote call options of the Nifty 50 across strikes. However, the fall in premium was comparatively less, which signals that the decline in the index is likely to be capped. A further fall of the 50-stock index is likely to attract buying interest and a recovery is expected to follow, according to technical and derivative analysts.

 

"The index has slipped below the 50EMA (50-day exponential moving average) on the hourly timeframe, indicating weakening short-term momentum," Rupak De, senior technical analyst at LKP Securities, said in a note. "However, the Nifty (50) found support exactly at the rising trendline formed by connecting multiple highs and lows on the hourly chart, which provides a basis to expect a decent recovery in the near term," he said.

 

Apart from in-the-money and at-the-money call options, traders sold out-of-the-money call options till 25500 strike price. Call options from strike prices 23900 to 25500 were sold aggressively, with premiums falling 33-66%. The highest concentration of open interest was at the 25000-strike call and maximum addition of new contract was at the 24000 call.

 

Put options of the Nifty 50 were bought but volumes were far lower than those seen in call options. Premiums on deep out-of-the-money put contracts rose more than 100-300% with the addition of up to 2.80 million contracts. The concentration of open interest peaked at the 24000-strike put. The addition of new contracts was the highest at the 23000 put.

 

The outlook for risky assets such as emerging market equities remains bleak in the near term, given the backdrop of prevalent geopolitical uncertainty, volatile crude oil prices, energy supply-chain disruptions, slowdown in corporate profit growth, and weaker income growth. A firm dollar index and a weaker Indian rupee, along with trade uncertainties, are adding to the pessimism, according to analysts.

 

On the other hand, market participants see some hope for equities given the continuing discussions between the US and India to finalise a trade deal. The US and Iran also agreed on a road map for a final peace deal within 60 days and to end the fighting in Lebanon, adding to the optimism in the market. Moreover, the US Treasury Monday issued a 60-day waiver from sanctions on Iranian oil as part of the interim agreement to end the war in West Asia. This also comes as positive news from the war front.

 

Friday, the Nifty 50 closed at 23824.10 points, down 1.2% or 278.80 points. In the futures market, traders added short positions in the June contract of the index. Open interest in the June futures rose 1.2% to 16.29 million, while the contract closed 1.3% lower at 23810 points, a discount of over 14 points to the spot level. Analysts expect the 50-stock index to face a hurdle immediately at 24000 points while a fall is likely to be stopped at 23600 points.

 

--Nifty 50 June closed at 23810.00, down 313.80 points; 14.10-point discount to the spot index

--Nifty 50 July closed at 23916.10, down 304.70 points; 92.00-point premium to the spot index

--Nifty 50 August closed at 24035.00, down 303.60 points; 210.90-point premium to the spot index

 

HDFC Bank, Reliance Industries, Infosys, ICICI Bank, Tata Consultancy Services, Hindalco Industries, Dixon Technologies (India), JSW Steel, Vedanta, State Bank of India, and Adani Green Energy were the most actively traded underlying stocks Tuesday.  End

 

Edited by Rajeev Pai

 

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