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Informist, Friday, Apr. 11, 2025

By Anjana Therese Antony

MUMBAI – The 90-day pause in tariffs by the US saw derivatives traders rush to buy out-of-the money call options of the Nifty 50. Bulls returned to place bets on the upside of the index after the market saw selling pressure Wednesday. Unlike most other global markets, the Indian market did not react to China's retaliation and closed sharply higher after falling on Wednesday. Indian financial markets were shut on Thursday for Mahavir Jayanti.

China on Friday increased the tariff on imports from the US to 125% from 84% earlier with effect Saturday and said that it has lodged another complaint with the World Trade Organization over US tariff hikes against the country. China also said that it will ignore further tariff hikes by the US on its goods. 

Though there are worries over the unpredictability of US President Donald Trump's decisions, the Indian markets outperforming global peers in the recent times is seen as a sign of relief.

Premiums on deep out-of-the-money call options of the 50-stock index doubled, while those on put options more than halved. At 22900-23500 call strike prices, premiums rose over 120% to INR 47-INR 235. These strikes are 3-4% higher than the Nifty 50's closing level of 22828.55 points Friday. On the other hand, premiums on put strikes of 22800-21500 points fell around 60% to INR 27-INR 202. The highest addition as well as concentration of open interest was at 24500-point call and 20400-point put contracts of the Nifty 50. Traders also added long positions in the April series of the index and open interest rose 2% to 13.43 million. So was the case with the May and June contracts.

A derivatives analyst said that foreign investors were likely net buyers on Friday. They were net sellers in the last eight sessions. They had also added short positions in index futures, indicating increased bearish approach towards India amid tariff uncertainties.

The focus is expected to turn to the March quarter earnings that kicked off this week. Various broking firms said that the March quarter, like the previous three quarters of 2024-25 (Apr-Mar), will continue to see slowdown in earnings growth as the macroeconomic environment has not improved meaningfully. With the Reserve Bank of India cutting India's GDP estimates for all four quarters of FY26 and US tariffs creating 'headaches' across global economies, there are worries that signs of improvement in earnings will be visible only from the second half of FY26.

--Nifty 50 Apr closed at 22948.00, up 468.35 points; 119.45-point premium to spot index

--Nifty 50 May closed at 23050.00, up 462.20 points; 221.45-point premium to spot index

--Nifty 50 Jun closed at 23149.50, up 454.70 points; 320.95-point premium to spot index

HDFC Bank, Tata Consultancy Services, Reliance Industries, Dixon Technologies India, ICICI Bank, Infosys, Bajaj Finance, Kotak Mahindra Bank, Tata Motors, Hindalco Industries, Larsen & Toubro, Tata Steel, State Bank of India, Coforge, and Bharti Airtel were the most active underlying stocks Friday.  End

Edited by Ashish Shirke

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