More Stories

Informist, Wednesday, Mar. 5, 2025

By Alina Geogy

MUMBAI – The Nifty 50 rose sharply Wednesday as traders aggressively covered short positions in the March futures and options contracts of the benchmark index, analysts said. Short covering in the market led the Nifty 50 to snap a 10-day losing streak, during which it had fallen almost 4%.

The short covering indicates a slight reversal in bearish sentiment after several sessions of continued selling pressure. Analysts expect the short covering to continue Thursday ahead of the expiry of the weekly options contracts. In the options chain of the Nifty 50 expiring Thursday, the maximum change in open interest on the call side was at the 22550-point strike price, where the premium rose almost 180%. The maximum change in open interest on the put side was at the 22200-point strike, where the premium fell 80%. The March futures contract of the Nifty 50 closed at 22445 points, a premium of 107.70 points to the spot index. Open interest in this contract fell more than 1% to 18 million, according to provisional data.

The bullish sentiment in the market is likely to continue, as long as the Nifty 50 is above 22200 points, Shrikant Chouhan, head equity research at Kotak Securities, said in a note. It could move up to 22500-22550 points, he said. On the flip side, the uptrend would be vulnerable if the index falls below 22200 points, he said. "Below this level, traders may prefer to exit their long positions," he said.

The reversal was expected as the market had reached an 'oversold' territory after continuous selling took the benchmark indices down around 15% from their record highs, analysts said. The Nifty 50 Wednesday ended 1.2% higher at 22337.30 points, with 45 constituents in the index ending up. Investor sentiment in the broader market was positive, too, as the indices outperformed the benchmarks and ended 2-3% higher. Over 80% of all stocks traded on the National Stock Exchange ended higher.

Some factors which lifted sentiment were the fall in crude oil prices, a sharp rise in the rupee, and comments of a US government official hinting at some relaxation in tariffs for some countries, according to analysts. The price of crude oil hit the $70-per-barrel mark Wednesday after the Organization of the Petroleum Exporting Countries and its allies decided to increase production from April.

Meanwhile, the Indian rupee posted its biggest single-day gain in over three weeks, rising above the 87 per dollar-mark, as the dollar index declined to a near four-month low Wednesday. The dollar index fell due to worries of a full-fledged global trade war after several countries threatened retaliatory measures in response to the Trump administration's latest tariffs. Tuesday, the US imposed 25% tariffs on goods from Mexico and Canada, and an additional 10% on China. In response, China said it would impose additional 10-15% tariffs on select products from the US from Mar. 10, thereby escalating a trade war between the world's two largest economies. In another surprising development, US Commerce Secretary Howard Lutnick Tuesday said Trump's administration could potentially announce a deal to reduce tariffs on Canada and Mexico as soon as Wednesday.

--Nifty 50 Mar closed at 22445.00, down 253.95 points
--Nifty 50 Apr closed at 22594.00, down 259.15 points; 256.70-point premium to spot index

--Nifty 50 May closed at 22717.65, down 267.55 points; 380.35-point premium to spot index

The most active underlying stocks on the NSE on Wednesday were BSE, Bajaj Finance, Coforge, HDFC Bank, State Bank of India, Trent, Adani Enterprises, Reliance Industries, Tata Steel, Infosys, ICICI Bank, Tata Consultancy Services, Mahindra & Mahindra, Vedanta, and Bharat Electronics.  End

US$1 = INR 86.95

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.