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Informist, Tuesday, May 27, 2025

By Anshul Choudhary

MUMBAI - Options data show the Nifty 50 is likely to move in a range as market participants are waiting for clear signs to assess the market's direction going forward. Traders sold call options as Tuesday's fall raised concern about further profit booking, but analysts hope the market will see only a minor fall before recovering again.

Traders sold call options across the board and unwound their long positions. Bullish sentiment was hit as the Nifty 50 failed to sustain gains made on Monday, which had pushed traders to add long positions then. Tuesday, the Nifty 50 faced selling pressure around 25000 points and closed the session 0.7% down at 24826.20 points. However, analysts still hope of a bounce-back as the index is above the support levels of 24500-24800 points.

"...the market is witnessing non-directional activity; perhaps traders are waiting for an either-side breakout," said Shrikant Chouhan, head of equity research at Kotak Securities, in a note. Several analysts said the Nifty 50 is likely to see a clear direction if it falls below 24500 points--seen as signs of a deeper fall--or crosses 25100 points--seen as signs of a sharper rise.

Trading in the put options showed the Nifty 50 is expected to fall more but may bounce back from around 24400 points. Traders continue to sell out-of-the-money put options below 24400 strike prices. However, a short fall is seen on the cards as they bought at-the-money and in-the-money put options, cutting their long positions.

Traders likely added short positions in the Nifty 50 as premiums fell and open interest rose. The May futures contract of the Nifty 50 Tuesday closed at a premium of 33.80 points to the spot index. Open interest in the contract rose nearly 5% to 9.85 million, according to provisional data.

--Nifty 50 May closed at 24860.00, down 175.90 points; 33.80-point premium to the spot index

--Nifty 50 Jun closed at 24954.70, down 173.00 points; 128.50-point premium to the spot index

--Nifty 50 Jul closed at 25081.00, down 173.00 points; 254.80-point premium to the spot index

HDFC Bank, ICICI Bank, Reliance Industries, InterGlobe Aviation, Infosys, Eternal, Bajaj Finance, Axis Bank, Mahindra & Mahindra, State Bank of India, ITC, Larsen & Toubro, Tata Consultancy Services, Hindustan Aeronautics, Kotak Mahindra Bank, Tata Motors, Bharat Electronics, and Jio Financial Services, Hindalco Industries, and Maruti Suzuki were the most active underlying stocks Tuesday.  End

Edited by Akul Nishant Akhoury

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