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Informist, Thursday, Jul. 24, 2025

By Akash Mandal

MUMBAI – Options data showed the Nifty 50 may fall sharply in the coming sessions if the Nifty 50 declines below its immediate support of 25000 points. While analysts still view 25,000 points as a strong support level for the 50-stock index, traders have bought puts at out-of-the-money and at-the-money strike prices, indicating expectations of a further decline if the index breaches the support.

Traders bought out-of-the-money put options above the 24300 strike prices with the highest open interest addition at the 24800 strike prices, followed by the 25000 strike prices, implying these levels will be crucial support for the index. On Thursday, the Nifty 50 closed 0.6% lower at 25062.10 points. 

"Nifty index bounced back from the lower band supports of upward sloping channel pattern that is placed around 24850 spot levels and now continuing its prevailing short term trend after facing price resistance around 25260-25300 spot levels... aggressive call writing at OTM (out of the money) strikes caused further pressure on the markets," Vipin Kumar, assistant vice-president and senior derivatives analyst at Globe Capital Market, said. 

Kumar also echoed that the Nifty 50 may fall further if its support is breached. "We expect it (Nifty 50) to trade with negative bias till it is trading below 25260-25300 spot zone on closing basis... a decisive close below 24800 spot levels will be a negative development that might take it towards 24500 and lower levels in the immediate near term," he said.

Premiums fell across the board on the call side. The highest open interest addition on the call side was seen at the 26000 strike price, followed by the 25200 strike price. This implies that the index is likely to face strong resistance at the 25200 levels, before it shows a possibility of crossing the 26000 levels.

Foreign investors have also been raising their short positions in index futures over the past few sessions, which has put the Nifty 50 under further pressure. "FPIs have maintained strong short positions in options... foreign players are reducing their position from the Indian market slowly," Ashish Sherigar, derivatives analyst at NVS Brokerage, said.

--Nifty 50 Jul closed at 25082.00, down 170.80 points; 19.90-point premium to the spot index

--Nifty 50 Aug closed at 25189.00, down 165.20 points; 126.90-point premium to the spot index

--Nifty 50 Sep closed at 25343.80, down 158.50 points; 281.70-point premium to the spot index

Infosys, Coforge, Canara Bank, Reliance Industries, Eternal, Persistent Systems, HDFC Bank, One 97 Communications, Tata Motors, Nestle India, State Bank of India, Axis Bank, Bajaj Finance, Dr Reddy's Laboratories, Bharti Airtel were the most active underlying stocks Thursday.  End

Edited by Saji George Titus

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