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Informist, Friday, Jul. 18, 2025

By Akash Mandal

MUMBAI – Traders added short positions and cut their long positions in call and put options of the Nifty 50 as the mostly weak quarterly results so far have had a negative impact on sentiment. The benchmark 50-stock index fell below its immediate support of 25000 points Friday, raising the possiblity of a further fall in the equity markets.

On the call side, traders added short positions at in-the-money contracts between 24850 and 24650 strike prices, indicating that sentiment is weak. However, Vipin Kumar, assistant vice-president and senior derivatives analyst at Globe Capital Market, does not expect a sharp fall from the current levels.

"I am not expecting a sharp fall," Kumar said. "Traders' behaviour at 25000 and 25100 CE (call options) are more significant to watch as any unwinding at these strikes might attract short covering." He recommended a "sell-on-rise" approach with options data showing sentiment to be negative.

Axis Bank, which is among the top 10 stocks by weightage in the Nifty 50, ended 5% lower Friday after a sharp rise in provisions led to a fall in its net profit. This resulted in the Nifty 50 ending 0.6% lower at 24968.40 points--closing below 25000 points for the first time since Jun. 23. On the call side, the 25100 and 25200 strike prices have the highest open interest, indicating that the Nifty 50 is likely to face strong resistance around those levels.

On the put side, traders bought out-of-the-money contracts at 24950-24650 strike prices, suggesting the possibilty of a further fall in the market. While analysts expect the Nifty 50 to stay above 24900 points, they also pointed to the risk of a fall to 24500-24600 points if profit-taking continues.

The direction of the market next week will be decided largely by the June quarter earnings. Reliance Industries will report its earnings later Friday, while ICICI Bank and HDFC Bank will report their results Saturday. Together, these stocks have a weightage of nearly 31% in the Nifty 50. Underwhelming results by any of these companies could push the market down, while positive earnings might revive its mood again.

--Nifty 50 Jul closed at 25026.80, down 147.80 points; 58.40-point premium to the spot index

--Nifty 50 Aug closed at 25137.00, down 137.80 points; 168.60-point premium to the spot index

--Nifty 50 Sep closed at 25295.00, down 141.20 points; 326.60-point premium to the spot index

Axis Bank, HDFC Bank, ICICI Bank, State Bank of India, Reliance Industries, Polycab India, Infosys, Wipro, Bandhan Bank, Bajaj Finance, Kotak Mahindra Bank, LTIMindtree, Tata Consultancy Services, Bharat Electronics, and L&T Finance were the most active underlying stocks Friday.  End

Edited by Rajeev Pai

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