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Informist, Friday, Apr. 25, 2025

By Anjana Therese Antony

MUMBAI – The investors had barely heaved a sigh of relief about global trade tariffs, that the tension between India and Pakistan came as a downside trigger, leading to bearish bets in the options chain of the Nifty 50 Friday. Traders aggressively added short bets in the derivatives chain and premiums on out-of-the-money call options of the 50-stock index tumbled while those on puts surged. Though the equity market came off lows, they closed in the red for the second straight session Friday, with investors being cautious, analysts said.

Pakistan Thursday suspended its bilateral agreements with India and closed its airspace to Indian airlines after New Delhi cut its ties with the neighbour following Tuesday's terror attack in Jammu and Kashmir's Pahalgam. This was in response to the suspension of the Indus Waters Treaty by India after at least 26 people were killed in the attack on civilians in Kashmir. 

Benchmark indices rose for seven straight sessions till Wednesday as sentiment improved after the US indicated that it might ease its stance with key trading partner China. "Given the strong uptrend, a time-wise correction seemed more probable, but the geopolitical uncertainty led to a sharper price correction instead," Rajesh Bhosale, equity technical analyst at Angel One, said in a post-market note. The Nifty 50 closed 0.9% lower at 24039.35 points Friday and the BSE Sensex ended 0.7% lower at 79212.53 points.

Premiums on 24000-24500 call strikes of the Nifty 50 expiring Thursday fell 53-72% and those on 24000-23000 put options increased 59-79%. The highest open interest addition was at 24500-point call and 23500-point put contracts. The fall in the spot market also had a ripple effect on the futures contracts of the Nifty 50, with the May, June, and July series closing over 1% lower each. Open interest in the May series rose 7.5% to 12.37 million and that in the June series rose 6.2% to 1.40 million. 

A near-term relief is the recent fall in foreign investors' short positions in index futures. They have also been net buyers in the cash market for eight sessions in a row Friday. As valuations have eased significantly since October, experts believe that foreign investors would turn their focus back to India in the medium-to-long term as corporate earnings are expected to improve and the market has shown resilience against tariffs compared to its global peers. 

--Nifty 50 May closed at 24120.00, down 253.00 points; 80.65-point premium to the spot index

--Nifty 50 Jun closed at 24212.00, down 262.50 points; 172.65-point premium to the spot index

--Nifty 50 Jul closed at 24325.10, down 365.70 points; 285.75-point premium to the spot index

Maruti Suzuki India, Reliance Industries, Axis Bank, HDFC Bank, ICICI Bank, Bajaj Finance, Tech Mahindra, State Bank of India, Infosys, InterGlobe Aviation, BSE Ltd., Tata Consultancy Services, Dixon Technologies India, SBI Life Insurance Co., Hindustan Aeronautics, Kotak Mahindra Bank, Bharti Airtel, Shriram Finance, and ITC were the most active underlying stocks on Friday.  End

Edited by Vandana Hingorani

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