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Informist, Thursday, May 22, 2025

By Anshul Choudhary

MUMBAI – Traders added short positions and cut long positions in options and futures contracts Thursday after the Nifty 50 failed to sustain Wednesday's gains. Options data suggest the Nifty 50 may fall below its support level of 24500 points before rising again.

The Nifty 50 has lost nearly 2% after it touched a seven-month closing high of 25062.10 points last Thursday. Worries about high valuations amid slow growth in earnings have led to investors selling stocks in the past few days. Thursday, the Nifty lost 200 points or 0.8% to close at 24609.70 points.

Selling pressure in the spot market in the past few days has pushed traders to add short positions as the possibility of touching 25000 points again appears low for now. For contracts expiring next week, traders sold call options across the board with significant open interest addition seen at 24600-25000 strike prices. Analysts expect the Nifty 50 to face resistance at 24800-24900 points, indicating an upside of 0.7-1.2%.

Data on the put side indicates the Nifty 50 is likely to fall more. Traders bought in-the-money and at-the-money put options. Significant open interest addition was seen at 24400-24600 puts. While analysts expect the Nifty 50 to stay above 24500 points, some traders have bought put options below the 24500 strike price, indicating a possibility of a further decline in the index.

The May futures contract showed traders have added short positions. The contract fell 167 points to 24665.10, while open interest rose nearly 6% to 11.41 million.

--Nifty 50 May closed at 24665.10, down 167.10 points; 55.40-point premium to the spot index

--Nifty 50 Jun closed at 24760.00, down 171.20 points; 150.30-point premium to the spot index

--Nifty 50 Jul closed at 24911.00, down 153.20 points; 301.30-point premium to the spot index

IndusInd Bank, BSE, Reliance Industries, ITC, HDFC Bank, Bharat Electronics, Dixon Technologies, Interglobe Aviation, Hindustan Aeronautics, ICICI Bank, Bajaj Finance, Tata Steel, Infosys, and Bharti Airtel were the most active underlying stocks Thursday.  End

Edited by Saji George Titus

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