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Informist, Thursday, Feb. 13, 2025

MUMBAI – Options data suggest traders added short positions as benchmark indices continued to face selling pressure at higher levels, with Nifty 50 ending lower for the seventh straight session Thursday. There is uncertainity over the market's direction as market participants await for more clarity on tariffs.

Analysts hope for more clarity or rather a relief from tariff threats as Prime Minister Narendra Modi and US President Donald Trump are scheduled to meet later in the day. Major indices ended lower ahead of the meeting despite CPI inflation print in January coming below expectations. The Nifty 50 rose as much as 0.8% intraday but investors soon took out profits and the index ended slightly lower at 23031.40 points. 

Options data suggest traders added short positions across the board. For call options expiring next week, the highest open interest addition was seen at 24000 strike price, followed by 23200-23400 strike prices. Analysts expect the Nifty 50 to face immediate resistance at 23200 points. Premiums fell across the board, with those at 23400 calls down by INR 22 to INR 53, and those at 23200 calls down by INR 28 to INR 116.

On the put side, significant open interest addition was seen at 22000-23000 strike prices, indicating expectations of further weakness ahead. For now, analysts hope the Nifty 50 will sustain about 22800 points. Analysts also hope some short-covering going ahead could aid sentiment and help markets post gains in the near term, but that is dependent on global cues as domestic earnings were poor in the December quarter.

"On the daily chart, the Index formed consecutive Doji candlestick (Long Legged Doji followed by Gravestone Doji), signaling uncertainty while also defending the key levels of 23,200 on the upside and 22,800 on the downside. A decisive movement on either side is necessary for a clear direction in the market," Aditya Gaggar, director of progressive shares, said in a note.

The February futures contract of the Nifty 50 closed at a premium of 63.25 points to the spot index. Open interest in the contract fell 0.4% to 17.51 million, according to provisional data.

--Nifty 50 Feb closed at 23094.65, down 29.20points
--Nifty 50 Mar closed at 23230.00, down 35.80 points; 198.60-point premium to spot index
--Nifty 50 Apr closed at 23385.00, down 26.10 points; 353.60-point premium to spot index

Kotak Mahindra Bank, Bajaj Finance, HDFC Bank, ICICI Bank, State Bank of India, Reliance Industries, Lupin, Jubilant Foodworks, Bharti Airtel, Tata Steel, Adani Enterprises, Muthoot Finance, Hindustan Aeronautics, SBI Cards and Payment Services, Infosys, and Bajaj Finserv were the most actively traded underlying stocks on Thursday.  End

Edited by Tanima Banerjee

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