More Stories

Informist, Thursday, Feb. 20, 2025

By Alina Geogy

MUMBAI – Market participants are unsure of what direction the benchmark indices might take in the near-term due to uncertainty over US tariffs and choppy flows of foreign institutional investors. Premiums fell across most calls and puts Thursday, and the Nifty 50 moved in a narrow range amid a tussle between the bulls and the bears.

Earlier in the day, market participants digested the minutes of the US Federal Reserve's policy meeting held in January. The minutes showed that Fed officials were broadly comfortable with their decision to hold rates and there were no signals of any change to their wait-and-watch stance on rate cuts. At the meeting, the Fed had kept interest rates steady in a range of 4.25-4.50%, citing elevated inflation pressures. The Fed had cut rates at its last three meetings of 2024 by a total of 100 basis points after holding rates near a two-decade high.

Officials of the central bank want to see "further progress on inflation" before deciding to cut interest rates again, the minutes showed. The Federal Open Market Committee, which sets the monetary policy, is expected to keep rates steady at its next meeting in March, too. Meanwhile, Trump's recent threats of tariff of 25% or more on automobile, pharmaceutical, and semiconductor imports are also weighing on investor sentiment. These likely tariffs are expected to make Indian products expensive, as companies may hike product prices to pass on the impact of these higher tariffs to customers.

Thursday, domestic benchmark indices ended lower due to worries about tariffs and the likelihood of key interest rates in the US being kept higher for longer. The Nifty 50 closed at 22913.15 points, down 19.75 points or 0.1%. Investors might opt for a cautious approach until there is some clarity about Trump's policies, and are likely to keep an eye out for any developments with respect to US trade and foreign policies, analysts said.

Analysts have mixed views about when a meaningful recovery in corporate earnings can be expected, particularly as several brokerages have cut earnings estimates after the results for the December quarter. "Earnings revisions reflect the continued slowdown in consumption and weakening of government capex spending," Elara Securities (India) said in a report Tuesday. "If these do not pick up significantly in the next six months, there could be risk to our FY26 earnings growth assumption," it said.

Premiums on 22900-26500 call options expiring on Feb. 27 fell 20-55% and those on 21100-22600 put strikes fell 18-48%. The highest addition of open interest for these options was at the 26500-point call and 22300-point put contracts. The 26500-point level is nearly 16% higher than the Nifty 50's closing level and the 22300-point level is just 3% lower. There were short bets added to the February futures contract of the Nifty 50, with open interest in the contract rising 0.4% to nearly 17 million.

--Nifty 50 Feb closed at 22934.90, down 29.60 points; 21.75-point premium to spot index
--Nifty 50 Mar closed at 23077.95, down 21.85 points; 164.80-point premium to spot index
--Nifty 50 Apr closed at 23225.00, down 22.00 points; 311.85-point premium to spot index

HDFC Bank, ICICI Bank, Reliance Industries, BSE, Axis Bank, Mahindra & Mahindra, Infosys, Kotak Mahindra Bank, Tata Motors, Maruti Suzuki India, Bharti Airtel, Bajaj Finance, State Bank of India, Tata Consultancy Services, Adani Enterprises, and Tata Steel were the most actively traded underlying stocks Thursday.  End

Edited by Ashish Shirke

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.