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Informist, Wednesday, Mar. 12, 2025

By Alina Geogy

MUMBAI – Uncertainty about tariff announcements by US President Donald Trump and worries about a recession in the world's largest economy because of retaliatory tariffs by its trade partners continued to affect domestic market sentiment Wednesday. Traders were seen adding short positions to the derivatives contracts of the Nifty 50 as they attempted to come to terms with latest developments related to US tariffs.

There is a "minor short built up" seen in the Nifty 50 derivatives, Jay Vora, senior technical and derivatives analyst at Indiacharts, said. Short positions were added across call options of the index expiring Thursday. For call option contracts expiring Thursday, the highest change in open interest was at the 22500-22600 strikes, where premiums fell 50-63%. These levels indicate an upside of 0.1-0.6% from the closing level Wednesday. Among put options, the maximum change in call contracts expiring this week was at the 22300-22350 strikes, which also saw a fall of about 49-54% in premiums. These levels are 0.5-0.8% lower than the current level.

The Nifty 50 closed 0.1% lower at 22470.50 points after spending most of the day in the red. It had fallen as much as 0.7% around noon but managed to come off lows later. The Nifty 50 has bottomed out and should break the recent lows formed, Vora of Indiacharts said. The index could rise higher in the next few weeks if this low is protected directionally, he said.

Market participants will continue to monitor news about US trade policies or statements from Trump about tariffs, as these have become a key source of cues for the market. Some of the recent sell-offs across global markets have been because of Trump, as he goes about, as promised, overhauling US policies ever since he assumed power at the White House. The Nifty 50 has fallen nearly 4% since Trump's administration came into power late January. The index is now down 14.5% from its lifetime high of 26277.35 points hit Sept. 26.

Trump's latest tariffs include charges of 25% on all imports of steel and aluminium. On Tuesday, Trump said he planned to double the tax rate on imports of steel and aluminum from Canada after the country retaliated against earlier tariffs with higher levies on electricity supplied to the US. However, both countries agreed to call off those levies late Tuesday.

"Technically, we are in a downtrend. If Nifty sustains above 23000 points, the trend will change," a technical analyst at a Mumbai-based brokerage firm said. On Wednesday, the March futures contract of the Nifty 50 closed at 22527 points, a premium of 56.50 points to the spot index. Open interest in this contract fell 0.2% to 17.55 million, as per provisional data.

--Nifty 50 Mar closed at 22527.00, down 37.30 points

--Nifty 50 Apr closed at 22670.00, down 37.25 points; 199.50-point premium to spot index

--Nifty 50 May closed at 22777.00, down 39.65 points; 306.50-point premium to spot index

Infosys, HDFC Bank, Bharti Airtel, Tata Motors, Reliance Industries, ICICI Bank, Kotak Mahindra Bank, Bajaj Finance, Tata Consultancy Services, Axis Bank, Zomato, Coforge, Wipro, State Bank of India, Indus Towers, and Tata Steel were the most active underlying stocks on the National Stock Exchange.  End

Edited by Ashish Shirke

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