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Informist, Friday, May 23, 2025

By Anshul Choudhary

MUMBAI – The Nifty 50 is expected to move in a range next week after the index made a sharp recovery Friday, recouping most of the losses from earlier this week. While traders covered their short positions as the Nifty 50 crossed its immediate resistance of 24750-24800 points, options data showed the index may now face resistance near 24900-25000 levels.

The 50-stock index closed at 24853.15 points, rising 1%. The index rose on strong gains in banks with shares of Axis Bank, Kotak Mahindra Bank, HDFC Bank, and ICICI Bank up 0.5-2.0%. In the past two months, gains in banks have helped the index recover from deep losses.

The Nifty 50 has risen over 12% in around three months with flows from foreign investors being a major contributor to this rise. This has raised hopes that the index may continue to rise, but some also argue that any gains will be limited after this sharp rise.

Traders bought in-the-money and at-the-money call options as the Nifty 50 recovered. Options data showed traders covered their short positions, which they had created earlier this week after the Nifty 50 fell close to 24500 points.

Traders have also sold call options above 24800 strike prices, indicating some concerns of profit booking at higher levels. They also added significant open interest at 24900-25000 strike prices and analysts expect these levels to act as immediate resistance.

Put options saw selling across the board with highest open interest addition at 24800 strike prices. Analysts expect 24600-24800 points to act as support for the Nifty 50.

The May futures contract of the Nifty 50 Friday closed at a premium of 36.85 points to the spot index. Open interest in the contract rose 5% to 10.95 million, according to provisional data. 

--Nifty 50 May closed at 24890.00, up 237.80 points; 36.85-point premium to the spot index

--Nifty 50 Jun closed at 24976.00, up 218.00 points; 122.85-point premium to the spot index

--Nifty 50 Jul closed at 25114.10, up 217.40 points; 260.95-point premium to the spot index

ITC, HDFC Bank, BSE, Reliance Industries, Bharat Electronics, Bajaj Finance, ICICI Bank, Infosys, Hindustan Aeronautics, Sun Pharmaceuticals, Bharti Airtel, Stata Bank of India, Eternal, Ashok Leyland, Vedanta, JSW Steel, Grasim Industries, Bharat Heavy Electricals, Kotak Mahindra Bank, Axis Bank, and IndusInd Bank were the most active underlying stocks Friday.  End

Edited by Tanima Banerjee

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