More Stories

Informist, Monday, Feb. 3, 2025

By Anjana Therese Antony

MUMBAI – Imposition of tariffs by the US on Canada, Mexico, and China led to a sell-off in global equity markets, including India, the impact of which was evident in the derivatives chain of the Nifty 50. However, a sharp fall is not anticipated for the Nifty 50 index at least till the weekly expiry of the options contract on Thursday. Premiums on deep out-of-the-money call options more than halved and those on out-of-the-money put contracts close to the spot level rose marginally. 

The tariff imposition came as a blow to investors, who were anticipating a gradual recovery in the market, which has fallen in the last four months. The domestic market also underperformed most of its global peers such as the US and China. Indian equities have been feeling the heat of disappointing earnings growth, a slowdown in the economy, depreciation of the rupee, a surge in crude oil prices, recurring foreign investor outflow, and expensive valuations. 

The Nifty 50 ended 0.5% lower at 23361.05 points and the Sensex closed 0.4% lower at 77186.74 points. Immediate support for the Nifty 50 is seen at 23100-23000 points and analysts do not expect it to fall below the lower end of the range. If so, the index could fall to 25500 points. On the other hand, resistance is pegged at 23500-23700 points. 

Premiums on 23300-24000 call strikes expiring Thursday declined 39-76% and those on 23300-23150 put options declined 3-7%. The maximum addition of open interest was at the 23500-point call and 23300-point put contracts. The futures contracts of the 50-stock index also mirrored this bearishness and traders exited some long positions from the February series. The contract closed 0.5% lower at 23440 points and open interest declined 0.5% to 17.30 million.  

"We stick with our Dec-25 Nifty (50) target of 25000...We retain our tilt toward consumption and add to our 'overweight' on consumer discretionary, which is our preferred route to play the theme," Emkay Global Financial Services said in its strategy report. The other beneficiaries are staples and financials, but both sectors suffer from a valuation-growth mismatch, and any rally should be short-lived, the broking firm said. 

Investors are turning their focus to consumer stocks--including fast-moving consumer goods, automobile, and retail--after the Indian government announced major tax relief for the middle class. This is expected to boost economic growth, drive demand for these sectors, and improve the financial performance of these companies in the coming quarters. 

--Nifty 50 Feb closed at 23440.00, down 115.55 points; 78.95-point premium to spot index
--Nifty 50 Mar closed at 23576.95, down 117.20 points; 215.90-point premium to spot index
--Nifty 50 Apr closed at 23718.05, down 120.90 points; 357.00-point premium to spot index

Bajaj Finance, Larsen & TOubro, Maruti Suzuki India, HDFC Bank, Divi's Laboratories, Hindustan Aeronautics, Reliance Industries, Bharat Electronics, Trent, Tata Motors, Mahindra & Mahindra, Voltas, ICICI Bank, State Bank of India, Infosys, Eicher Motors, Bharti Airtel, and TVS Motor Co. were the most actively traded underlying contracts.  End

Edited by Avishek Dutta

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.