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Informist, Wednesday, Feb. 12, 2025

By Anjana Therese Antony

MUMBAI – After the benchmark indices managed to recover most of their intra-day fall Wednesday, traders seem unsure about the market direction in the near term. Premiums across calls and puts tumbled and some derivatives analysts said the near-term bearishness may remain until investors get some clarity on US policies. Comments by US Federal Reserve Chair Jerome Powell that the central bank is not in a hurry to cut interest rates added to the investor worries. The likely selling pressure from foreign investors and recent redemption pressure in mid-cap and small-cap funds due to stretched valuations also dented the sentiment.

While most global markets rose Wednesday, the Indian market was an underperformer, down for the sixth straight session. The Nifty 50 closed 0.1% lower at 23045.25 points and the BSE Sensex ended 0.2% lower 76171.08 points. Though both indices fell more than 1% each below their psychologically important levels of 23000 points and 76000 points, they later managed to rise above these levels. Weekly expiry of options contracts of the Nifty 50 on Thursday is likely to lead to some volatility. 

Premiums on 23000-23600 call options expiring Thursday declined 32-75% and those on 23000-22500 put strikes fell 18-42%. The highest addition of open interest was at 23000-point call and 22500-point put contracts. There were short bets added to the February futures series of the index, with the contract falling 0.1% and open interest rising 4.4% to 18 million.

"We hold Nifty December target of 25000 (points). For sector positioning, we retain our tilt toward consumption and add our weights on consumer discretionary, which is our preferred route to play the consumption theme," Jaykrishna Gandhi, head of business development – institutional equities at Emkay Global Financial Services, said in a post-market note. Incremental growth is the sharpest for these sectors and valuations are still reasonable, Gandhi said.

Fall in domestic inflation is likely to provide some relief to investors. India's CPI inflation fell to a five-month low of 4.31% in January from 5.22% in December, thanks to fall in food prices. Investors will now wait for US inflation data for January, due late Wednesday.

--Nifty 50 Feb closed at 23132.00, down 21.15 points; 86.75-point premium to spot index
--Nifty 50 Mar closed at 23270.00, down 23.80 points; 224.75-point premium to spot index
--Nifty 50 Apr closed at 23425.00, down 16.00 points; 379.75-point premium to spot index

Reliance Industries, HDFC Bank, ICICI Bank, State Bank of India, Bajaj Finance, Hindustan Aeronautics, Infosys, Power Finance Corp., BSE, Bharti Airtel, Ashok Leyland, Lupin, Axis Bank, Kotak Mahindra Bank, Tata Motors, Mahindra & Mahindra, Dixon Technology India, and Bharat Electronics were the most actively traded underlying stocks on Wednesday. End

Edited by Ashish Shirke

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