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Informist, Tuesday, Mar. 25, 2025

By Alina Geogy

MUMBAI – Traders cut their long positions in the derivatives segment of several banking stocks Tuesday after investors booked profits following a winning streak that lasted over a week. The Nifty Bank index, comprising 12 major banking stocks, had gained over 8% in the past eight sessions. However, the index snapped the eight-day winning streak Tuesday due to profit booking in this sector, analysts said.

For the Nifty Bank options expiring Thursday, the highest addition in open interest was at the 53000, 52000, and 51900 call strikes, indicating an upside of 0.6-2.7% from the closing level. The maximum addition in open interest was at the 50200 and 51500 put strikes, indicating levels which are up to 2.7% lower than Nifty Bank's current level. Premiums fell across most put and call options. The Nifty Bank index closed at 51607.95 points, down 0.2%.

Early Tuesday, the banking index extended gains and rose as much as 0.7% to hit a three-month high of 52063.95 points, after which the profit-booking began and dragged the index down 0.3% to its intraday low. Shares of IndusInd Bank, Canara Bank, Punjab National Bank, State Bank of India, and ICICI Bank were the major laggards in this index.

Losses in some banking stocks such as ICICI Bank and State Bank of India also weighed on the benchmark Nifty 50 index, leading it to close almost flat at 23668.65 points on Tuesday. Axis Bank and HDFC Bank were the only banking stocks to end with gains among Nifty 50 constituents. The benchmark Nifty 50 index and the BSE Sensex had risen around 1% to their near three-month highs of 23869.60 points and 78741.69 points, respectively. However, the indices came off their intraday highs due to sector-wide profit-booking.

The profit booking comes ahead of the US administration's tariffs, which are likely from Apr. 2. US President Donald Trump had said he would impose reciprocal tariffs on its trading partners, along with duties on imports targeting sectors, such as automobile and pharmaceuticals. However, latest news reports have said Trump's planned reciprocal action may be more targeted than originally thought. The administration has narrowed its focus to about 15% of nations with persistent trade imbalances with the US, and the sectoral tariffs are now unlikely to be announced next week, various news reports said.

The expiry of the March derivatives series of the Nifty Bank and Nifty 50 is due Thursday. For options contracts of the Nifty 50 expiring Thursday, the highest buildup in open interest was at the 25000-call strike with nearly 14 million contracts, indicating a strong resistance in the near term at this level. Both the highest open interest and the maximum change in open interest among weekly call options were at this strike. Premium on this contract fell 20%. For put options expiring this week, the highest open interest was at the 23000-strike and the maximum change in open interest was at the 23700-strike. Premiums on these put contracts fell 10-40%.

As long as the Nifty 50 remains above 23300 points, it is expected to consolidate within 23300-23800 points, said Rupak De, a senior technical analyst at LKP Securities, in a note. Immediate support is placed at 23600 points, and a decisive drop below this level could drive the index toward 23300 points, he said. On the upside, resistance is at 23800 points, and a breakout above this level may resume the rally, he said.

The March futures contract of the Nifty 50 closed at 23665.15 points, at a discount of 3.50 points to the spot index. Open interest in this contract rose 12% to 14.45 million, as per provisional data.

--Nifty 50 Mar closed at 23665.15, down 34.20 points

--Nifty 50 Apr closed at 23820.00, down 24.15 points; 151.35-point premium to spot index

--Nifty 50 May closed at 23941.00, down 38.70 points; 272.35-point premium to spot index

HDFC Bank, ICICI Bank, Reliance Industries, Bajaj Finance, Infosys, Tata Consultancy Services, State Bank of India, Axis Bank, Kotak Mahindra Bank, Bharti Airtel, Larsen & Toubro, Mahindra & Mahindra, UltraTech Cement, ITC, Tata Motors, Hindustan Aeronautics, Zomato, Adani Enterprises, Hindustan Unilever, and Bank of Baroda were the most actively traded underlying stocks on the National Stock Exchange.  End

Edited by Akul Nishant Akhoury

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