More Stories

Informist, Tuesday, Apr. 8, 2025

By Anjana Therese Antony

MUMBAI – Traders in the options chain of the Nifty 50 added slightly bullish bets ahead of the Reserve Bank of India's monetary policy committee's meeting outcome, due Wednesday. Premiums on call options above 23000 points of the Nifty 50 expiring next week rose, while those on out-of-the-money put strikes declined, indicating at the slight upside potential. However, derivatives analysts said that the outlook is hazy as there are no clear signs about the next leg of US tariffs.

India's apex bank is widely expected to reduce the repo rate further by 25 basis points to 6.00% and also change its stance to 'accomodative' from 'neutral'. "While the extent of trade war pain is unclear, monetary policy may have to do the heavy lifting in India," Emkay Global Financial Services said in its report. "We will keep a lookout for any overhaul of the current liquidity framework in the near term and fiddle with non-conventional easing tools ahead apart from conventional easing, if the growth situation worsens or financial stability is disrupted," the broking firm said. 

India's central bank's monetary policy meeting gains prominance amid US tariffs and retaliatory measures from its key trading partners, which have been increasingly raising concerns about a possible recession in the US. In its meeting in February, India's Monetary Policy Committee members had unanimously voted to reduce the repo rate by 25 bps to 6.25%. However, benchmark indices had ended marginally lower, following the policy outcome as the RBI retained its 'neutral' stance and dented hope of further rate cuts. 

On Tuesday, the Indian equity market took a breather after three sessions of sell off caused by US tariffs and concerns about a likely slowdown in the US economy. The Nifty 50 closed 1.7% higher, or 374.25 points, at 22535.85 points Tuesday, rising after three days of decline. The near-term support for the index is pegged at 22300-22400 points and resistance at 23400-23500 points, according to technical and derivatives analysts at three domestic broking firms. This week, options contracts of the Nifty 50 will expire Wednesday as the equity market will be shut on Thursday for Mahavir Jayanti. 

Premiums on 22500-23900 call options expiring Apr. 17 rose 10-18% to INR 36-INR 386.60, while those on put contracts below 22500 points nearly halved. The highest open interest addition was at 24500-point call and 22300-point put options, both expiring next week. On Monday, premiums on deep out-of-the-money put options had surged over 1,000-5,000% after the market fell on worries about a likely global economic slowdown. Analysts had said that these options were overpriced on Monday. 

The quantum of selling by foreign investors are also increasing after it had eased in March. On Monday, foreign investors net sold INR 90.40 billion worth of equities, higher than the INR-34.84-billion net offloaded a session before. Their short positions in index futures are also increasing, with FIIs adding more than 15,600 bearish positions Monday and exiting more than 5,400 long positions, derivatives analysts said. As a result, their short positions have increased to 75% on Monday from 71% on Friday. 

The domestic market likely shrugged off the clash between the US and China on tariffs. US President Donald Trump on Monday threatened to impose an additional 50% tariff on Chinese goods if the country failed to remove the 34% retaliatory tariffs it has imposed on imports from the US. In response to that, China said it will never accept US's 'blackmail nature' and that it will 'fight to the end'. "Whether deals are struck or retaliation intensifies, the outlook remains extremely uncertain," Nomura Global Markets Research said in its report. 

--Nifty 50 Apr closed at 22646.25, up 382.45 points; 110.40-point premium to spot index

--Nifty 50 May closed at 22767.90, up 399.45 points; 232.05-point premium to spot index

--Nifty 50 Jun closed at 22871.95, up 411.50 points; 336.10-point premium to spot index

HDFC Bank, Reliance Industries, ICICI Bank, Bajaj Finance, Infosys, State Bank of India, Tata Consultancy Services,Axis Bank, Titan Co., Trent, Tata Motors, BSE, Mahindra & Mahindra, Bharti Airtel, Zomato, Tata Steel, ITC, and Larsen & Toubro were the most active underlying stocks Tuesday.  End

Edited by Deepshikha Bhardwaj

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.