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Informist, Tuesday, Aug. 19, 2025

 

By Akash Mandal

 

MUMBAI – Despite benchmark stock indices ending in the green for the fourth straight session Tuesday, options data showed traders remain cautious and sold most call options contracts of the Nifty 50 expiring Thursday. Some derivatives analysts said the Nifty 50 is likely to face a strong hurdle at its psychologically important 25000 level, but will rise further once this resistance is crossed. Some derivatives analysts said the index can even reach the next crucial level of 26000 once the 25000 level is crossed. 

 

Derivatives analysts also expect the short covering to continue gradually at least till the monthly expiry on Aug. 28, as foreign investors have been keeping significant short positions in index futures. The long-short ratio for FIIs was just 11% Monday, Nandish Shah, senior derivatives analyst at HDFC Securities, said. Positive factors such as the proposed GST reforms, softer crude oil prices, and an appreciating rupee have likely driven these traders to cover their short positions over the past few sessions, he added. 

 

While most analysts agree that the proposed GST reforms are a big step to revive demand, most are still cautious as they wait for more details about the rate rationalisation. Many analysts believe that the impact of rationalisation will ultimately have to be reflected in companies' financial growth and earnings, for the Nifty 50 to return to its all-time high of 26277.35 points, achieved in September 2024. This is still nearly 1300 points higher than the current level. 

 

Traders added short bets across most call contracts, with the maximum open interest addition at the 25500 strike price. The 25300 call strike price also saw a significant addition of open interest Tuesday. The highest open interest concentration was at 25000 and 25500 call strikes, followed by 25200, 25300, and 26000 contracts. 

 

On Tuesday, the Nifty 50 ended higher, buoyed by short covering in index derivatives. Traders covered many deep in-the-money call strike prices. They also exited some deep in-the-money put options, indicating that a sharp correction is unlikely. However, gains were limited by some long unwinding across a handful of deep out-of-the-money call strike prices. The 50-stock index closed the session at 24980.65 points, up 103.70 points or 0.4%. 

 

On the puts side, traders sold across strikes, with 24900 and 25000 strike prices having the maximum open interest addition as well as concentration. While some analysts anticipate the Nifty 50 to fall before rising again, most experts said the index is unlikely to see a sharp fall. Anshul Jain, head of research at Lakshmishree Investments, sees the 50-stock index retest the 24600-24700 levels before rising towards the 25200-25300 levels. 

 

--Nifty 50 Aug closed at 25036.00, up 69.20 points; 55.35-point premium to the spot index

--Nifty 50 Sept closed at 25175.00, up 71.00 points; 194.35-point premium to the spot index

--Nifty 50 Oct closed at 25297.90, up 73.80 points; 317.25-point premium to the spot index

 

Reliance Industries, HDFC Bank, Tata Motors, Maruti Suzuki India, One97 Communications, Eternal, Bajaj Auto, Mahindra & Mahindra, Hero MotoCorp, Exide Industries, Bharti Airtel, ICICI Bank, BSE, Vodafone Idea, and PNB Housing Finance were the most active underlying stocks Tuesday.  End

 

Edited by Saji Geroge Titus

 

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