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Informist, Friday, Aug. 1, 2025

By Akash Mandal

MUMBAI – Options data showed there is a possibility the Nifty 50 may fall below its support of 24500 points next week and even to 24200 points. Risks emerging from US tariffs pushed traders to add short positions and cut their long options in option contracts of the Nifty 50. Traders added short positions at both out-of-the-money call and put options. There was also some long unwinding at in-the-money put options, which also impacted sentiment on Friday.

On the put side, traders added short bets at both in-the-money and out-of-the-money options. The maximum open interest addition was at the 24200 strike price, with open interest rising by 140% or nearly 4 million contracts. This indicates a strong possibility that the Nifty 50 might fall to the 24200 levels next week. The second highest open interest was at the 24000 strike price, implying further pain if the Nifty 50 fails to stay above 24200 points. There was also some long unwinding at in-the-money options between 24800-25450.

On Friday, the Nifty 50 rose close to the 24800 level at its intraday high, but was unable to cross that hurdle and eventually ended 203 points lower at 24565.35 points. The index had also failed to cross the 25000-point resistance on Thursday despite having recovered strongly from its intraday low. These two sessions, where the Nifty 50 failed to sustain at higher levels, is likely to have pushed traders to add further short bets at out-of-the-money put options.

On the call side, traders sold contracts across the board as chances of a strong rally dwindle amid selling pressure at higher levels. The maximum open interest was at the 24700, 24800, and 25000 strike prices, implying that the Nifty 50 might face resistance around these levels in the near-term.

Analysts maintain that the near-term sentiment remains weak due to lukewarm earnings, muted outlook provided by most companies, and geopolitical headwinds. "Global headwinds intensified this week for Indian markets, with the U.S. imposing a 25% tariff and additional penalties on Russian oil imports, amplifying uncertainty...the Q1 earnings season disappointed, leading to EPS downgrades for FY26--negative surprises punished more than positive ones rewarded," Jyoti Prakash, managing partner, equity and portfolio management services at AlphaaMoney, said in a note. 

--Nifty 50 Aug closed at 24618.00, down 253.60 points; 52.65-point premium to the spot index

--Nifty 50 Sep closed at 24760.00, down 254.70 points; 194.65-point premium to the spot index

--Nifty 50 Oct closed at 24878.00, down 261.50 points; 312.65-point premium to the spot index

PNB Housing Finance, Hindustan Unilever, ICICI Bank, Infosys, HDFC Bank, UPL, Reliance Industries, State Bank of India, Mahindra & Mahindra, Sun Pharmaceutical Industries, Maruti Suzuki India, Eicher Motors, Axis Bank, TVS Motor Co., and Cholamandalam Investment and Finance Co. were the most active underlying stocks Friday.  End

Edited by Ashish Shirke

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