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Informist, Friday, Mar. 28, 2025

By Alina Geogy

MUMBAI – Traders were seen unwinding their long positions in the derivatives segment of the Nifty 50 on Friday as investors booked profits following a recent rally. However, the underlying trend is still bullish as market participants now have opted for a 'buy-on-dips' approach, analysts said. However, the market is expected to consolidate for a few more sessions, and the Nifty 50 may even touch 23200 points before it resumes its upward recovery, they said.

Caution ahead of the Apr. 2 deadline is a likely factor for the weakness in the market Friday, analysts said. US President Donald Trump will announce reciprocal tariffs on its trading partners on Apr. 2. While several analysts have ruled out hefty tariffs targeting key sectors such as pharmaceuticals, there are still worries of a negative surprise on Wednesday. Trump has already imposed 25% tariff on automobile imports, which will take effect next week, and this had triggered a sell-off in several automobile stocks across the globe.

The Nifty 50 index fell as much as 0.6% during the session Friday, but recouped most losses to settle at 23519.35 points, down 0.3%. Despite this fall, the index is still up 0.7% this week. Friday's session also marked the last trading session of the financial year 2024-25 (Apr-Mar).

"I feel we are in a consolidation phase now, and it's a little bit of a breather now," Anita Gandhi, whole-time director of Arihant Capital Markets, said. "Today's trading session will fall into the new financial year from a settlement perspective. So there are no major cues from here and the market will now be looking forward to the quarterly numbers (March quarter earnings)," she said.

For the Nifty 50 options expiring next week, both the highest addition in open interest and maximum open interest concentration was at the 25400 call strike, indicating strong resistance at this level, up 8% from the closing level. Similarly, the maximum addition in open interest and the highest open interest among put options was at the 22500 strike, indicating strong support at this level, which is 4% lower than Nifty 50's current level. Premiums fell 10-18% on these put and call strikes.

More consolidation is expected in the market for the short term, as per technical charts, Nagaraj Shetti, senior technical research analyst at HDFC Securities, said in a note. "The near-term uptrend of Nifty remains intact and the downward correction from the highs has not damaged the underlying uptrend so far," he said. Immediate support is placed at 23400 points, which is the 200-day exponential moving average, and the overhead resistance is to be watched at around 23650 points and next 23850 points for the coming week, he said.

Thursday marked the expiry of the March derivatives series of the Nifty 50. There was only 76% rollover of long positions in the Nifty 50 futures, which is lower in comparison to the three-month average rollover of 80% and even the six-month average of 78%. This means that during the recent market recovery, traders have exited some of their long positions instead of rolling over their positions, Anshul Jain, head of research at Lakshmishree Investment and Securities, said.

The April futures contract of the Nifty 50 closed at 23643 points, at a premium of 123.65 points to the spot index on Friday. Open interest in this contract rose almost 3% to 12.77 million, according to provisional data.

--Nifty 50 Mar closed at 23643, down 134.65 points

--Nifty 50 Apr closed at 23765, down 133.15 points; 245.65-point premium to spot index

--Nifty 50 May closed at 23880, down 144.70 points; 360.65-point premium to spot index

BSE, HDFC Bank, Reliance Industries, ICICI Bank, Hindustan Aeronautics, Mahindra & Mahindra, Infosys, Oil and Natural Gas Corp., Zomato, Bajaj Finance, Bharat Heavy Electricals, Tata Motors, Trent, State Bank of India, Kotak Mahindra Bank, Bharat Electronics, IndusInd Bank, Dixon Technologies (India), Tata Consultancy Services, Maruti Suzuki, Adani Enterprises, UPL, and Axis Bank were the most actively traded underlying stocks on the National Stock Exchange.  End

Edited by Tanima Banerjee

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