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Informist, Tuesday, Apr. 15, 2025

By Anjana Therese Antony

MUMBAI – Traders added bullish bets in the options as well as futures segment of most automobile companies after US President Donald Trump said he is looking "at something to help car companies." Trump is also exploring possible temporary exemptions for vehicles and parts imported into the US and give such companies enough time to set up manufacturing facilities in the country. Automobile companies were among the sectors that were expected to feel the most pressure due to US tariffs. Premiums on out-of-the-money contracts close to the spot levels of the top gainers in the sector rose Tuesday, while those on put options declined, indicating that these stocks are unlikely to fall in the near term.

Trump announcing exemption for smartphones and other electronics products also provided relief, boosting hopes that he would announce similar such relief for other sectors too. Some research analysts said that the US president's decision to provide relief for its trading partners indicates that he is feeling the pressure of tariffs on the US economy. However, concerns persist as there is no major clarity on further US tariff policies and if there could be any more negative surprises due to Trump's 'unpredictable' decisions in the recent past, analysts said.

Shares of Eicher Motors, Hero MotoCorp, Tata Motors, Bharat Forge, and Samvardhana Motherson International closed 3-8% higher on the National Stock Exchange on news of likely relief for the sector. In the options chain of Bharat Forge, premiums on INR 1,080-INR 1,240 call strikes expiring Apr. 24 rose 39-183%, while those on INR 1,060-INR 1,020 put contracts fell 73-81%. The stock closed 7.1% higher at INR 1,073.10 on the NSE.

Similar was the trend in the options chain of Samvardhana Motherson, which closed nearly 8% higher at INR 127.63. Premiums on INR 127.50-INR 147.50 call options of the company rose 25-117%, while those on put strikes of INR 125-INR 105 fell 75-85%. The highest open interest addition was at INR 140 call and INR 125 put contracts. The stock was among the worst-hit among auto companies when Trump had initially announced tariffs on auto and auto parts imported from Canada and Mexico.

Auto was the second-biggest gainer among sectors Tuesday and pushed the Nifty 50 higher by 0.2%. The sector has the fourth-highest weightage of 6.9% in the 50-stock index, constituting five blue chip players. The Nifty 50 closed 2.2% higher at 23328.55 points and the BSE Sensex ended 2.1% higher at 76734.89 points. The near-term support for the 50-stock index is pegged at 23200-23000 points and resistance at 23450-23600 points, as per estimates from technical and derivatives analysts at two broking firms.

The Nifty 50 options chain data shows lesser possibility of an upside for the index as traders have bought very few strike prices close to the spot level. Premiums on 23300-23400 call options of the index rose 7-38% to INR 64-INR 111. On the other hand, premiums across out-of-the-money put options such as 23300-22000 strikes declined 83-94% to INR 3-INR 84. The 23300-point call and put contracts have the highest open interest addition. The ease in near-term nervousness in the market was also evident from the fear gauge India VIX, which closed nearly 20% lower at 16.1250. 

--Nifty 50 Apr closed at 23364.40, up 446.75 points; 35.85-point premium to spot index

--Nifty 50 May closed at 23472.00, up 444.90 points; 143.45-point premium to spot index

--Nifty 50 Jun closed at 23560.30, up 433.50 points; 231.75-point premium to spot index

HDFC Bank, ICICI Bank, Infosys, Reliance Industries, Dixon Technologies India, Bharti Airtel, State Bank of India, Bajaj Finance, Axis Bank, Tata Motors, BSE Ltd., Tata Consultancy Services, Kotak Mahindra Bank, IndusInd Bank, and Maruti Suzuki India were the most active underlying stocks Tuesday.  End

Edited by Ashish Shirke

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