More Stories

Informist, Wednesday, May 28, 2025

By Anshul Choudhary

MUMBAI – The Nifty 50 is likely to fall more in the near term, but the fall is expected to be minor, options data show. High valuation of stocks after a steep rise in the past two months has raised the risk of investors booking profits, analysts said.

A two-day fall in the market, with the Nifty 50 ending below its immediate support of 24800 points Wednesday, pushed options traders to add short positions. Wednesday, the Nifty 50 closed slightly down at 24752.45 points. The index has fallen nearly 1% in two sessions.

"The F&O pits paint a picture of bears sharpening their claws. Call writers are stacking up at the higher levels, while put writers keep creeping lower--a classic risk-off setup," Dhupesh Dhameja, derivatives research analyst at SAMCO Securities, said in a note.

For call options expiring Thursday, traders sold call options across the board with significant open interest addition at 24750-25500 strike prices. Analysts expect the Nifty 50 to face resistance at 24900-25000 points. "The 25,000 call strike now holds the crown for the heaviest open interest at 1.32 crore contracts, building a solid overhead wall," Dhameja said in his note.

Selling pressure on the Nifty 50 at 24900-25000 points has pushed traders to buy in-the-money put options. Traders bought put options above 24900 strike prices and even unwound their long positions.

Traders continued to sell out-of-the-money put options amid hopes that fall in the market is likely to be minor and gains are likely to come soon. Highest open interest addition was seen at 24450-24750 puts. Analysts expect 24500 level will be a major support for the index.

Futures contracts also indicated traders have added short positions. The May futures contract of the Nifty 50 closed at a discount of 4.75 points to the spot index. Open interest in the contract rose 12.7% to 8.66 million, according to provisional data.

--Nifty 50 May closed at 24747.70, down 114.90 points

--Nifty 50 Jun closed at 24853.00, down 110.40 points; 100.55-point premium to the spot index

--Nifty 50 Jul closed at 24980.00, down 114.70 points; 227.55-point premium to the spot index

HDFC Bank, ICICI Bank, Reliance Industries, Bajaj Finance, ITC, Infosys, Axis Bank, Bharti Airtel, Kotak Mahindra Bank, Eternal, Mahindra & Mahindra, State Bank of India, Bharat Electronics, InterGlobe Aviation, Oil and Natural Gas Corp., Larsen & Toubro, BSE, and Adani Enterprises were the most active underlying stocks Wednesday.  End

Edited by Akul Nishant Akhoury

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.