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Informist, Monday, Jun. 9, 2025

By Anshul Choudhary

MUMBAI – Options data show the Nifty Bank index is likely to continue to scale fresh lifetime highs on hopes of better credit growth in the current financial year and lower cost of funds in the coming quarters. The sectoral index is likely to move towards 58000-59000 points this month, indicating a further rise of 2-4%.

The net interest margins of banks are expected to benefit from the sharp 100-basis-point cut in Cash Reserve Ratio announced Friday. This is likely to infuse liquidity of 2.5 trillion into the banking system. "We calculate 100 bps of CRR cut should incrementally aid banks' NIM by 7–8 bps starting Q3FY26 (Oct-Dec)," ICICI Securities said in a note.

Though the sharp 50-bps cut in the repo rate is expected to pull down banks' margins in the near term, lower rates are also expected to boost credit growth and aid margins in the medium term, analysts said. ICICI Securities and Elara Securities expect a large part of the impact on NIMs to happen in the September quarter, and margins to start recovering from the December quarter.

Call options data showed traders bought contracts across the board, indicating hopes of gains. Significant open interest was seen at 58000-59000 strike prices and these levels are likely to act as immediate resistance.

However, traders sold deep out-of-the-money calls, specifically above 59700 strike prices. This level may prove difficult for the sectoral index to breach as it has already risen to a lifetime high on Monday. The Nifty Bank rose for the fourth straight session on Monday and closed at a lifetime high closing level of 56839.60 points, gaining over 2% during this period.

Bullish sentiment in the index is intact at least in the near term. Traders sold put options across the board with the highest open interest addition at 57000 strike prices, indicating the index may rise once the market opens for trading Tuesday. If it fails to gain, options show the sectoral index is expected to find first support at 56000 points, a fall of over 1%.

Options show the outlook for the Nifty 50 is also positive, but gains may be capped owing to the sharp rise in the index recently. The index is expected to move in a range of 24800-25200 points after closing Monday's session at 25103.20 points, up 0.4% from Friday.

The June futures contract of the Nifty 50 closed at a premium of 81.80 points to the spot index. Open interest in the contract was marginally down at 12.13 million, according to provisional data.

--Nifty 50 Jun closed at 25185.00, up 88.70 points; 81.80-point premium to the spot index

--Nifty 50 Jul closed at 25318.00, up 91.10 points; 214.80-point premium to the spot index

--Nifty 50 Aug closed at 25428.00, up 88.20 points; 324.80-point premium to the spot index

Bajaj Finance, Multi Commodity Exchange of India, ICICI Bank, State Bank of India, HDFC Bank, BSE, Bajaj Finserv, Kotak Mahindra Bank, Indian Energy Exchange, Adani Enterprises, Reliance Industries, Eternal, InterGlobe Aviation, and Bandhan Bank were the most active underlying stocks Monday.  End

Edited by Saji George Titus

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