More Stories

Informist, Friday, May 9, 2025

By Anshul Choudhary

MUMBAI – Traders reduced their positions across call and put options on risk aversion as Pakistan fired missiles and drones at several parts of western and northwestern India Thursday night, heightening the tension between the nuclear-armed neighbours. Indian forces intercepted several projectiles from Pakistan overnight, and blackouts were imposed across Jammu and Kashmir and in parts of Punjab and Rajasthan. Attempts by terrorists to infiltrate into India were also reported. The Border Security Force said it had killed seven infiltrators.

All of this has led to caution among investors and many chose to sell for profit, given the risk of the conflict escalating, analysts said. "People have lightened their positions because of India-Pakistan tensions ahead of the weekend. Everyone is in wait-and-watch mode and markets seem to be rangebound," a technical analyst with a domestic brokerage said.

Options data show that any upside for the benchmark indices is likely to be limited after sharp gains in March and April. Friday, traders sold call options across the board with maximum addition of open interest at 24000-25000 strike prices.

The Nifty 50 has moved in a wide range of 23800-24600 points in the past three weeks and analysts expect it to move in this range next week as well. Friday, the Nifty 50 closed at 24008.00 points, down 1.1%.

While analysts expect the downside in equities due to escalation of tensions at the border to be limited, an upside is also likely to be limited because of high valuations. "...sharp outperformance for Indian stocks in the short term (in March and April) driven by a reversal in FPI (foreign portfolio investor) outflows and sustained buying by DIIs (domestic institutional investors) leaves little room for high gains from hereon," ICICI Securities said in a strategy report Thursday.

Some traders bought put options amid risks of a full-blown war between India and Pakistan while others covered their positions due to the uncertainty. The highest open interest on the put side was at 24000 strike prices, followed by 23000 strike prices.

The May futures contract of the Nifty 50 closed at a premium of 84 points to the spot index. Open interest in the contract rose 6.9% to 13.66 million, according to provisional data.

--Nifty 50 May closed at 24092.00, down 179.90 points; 84.00-point discount to the spot index

--Nifty 50 Jun closed at 24190.90, down 171.70 points; 182.90-point premium to the spot index

--Nifty 50 Jul closed at 24330.20, down 180.70 points; 322.20-point premium to the spot index

HDFC Bank, ICICI Bank, Tata Motors, Reliance Industries, Larsen & Toubro, State Bank of India, Titan Co., Bharat Electronics, Hindustan Aeronautics, Bajaj Finance, BSE, Interglobe Aviation, Indian Hotels, and YES Bank were the most active underlying stocks Friday.  End

Edited by Rajeev Pai

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.