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Informist, Wednesday, Aug. 20, 2025

 

By Akash Mandal

 

MUMBAI – Even as the Nifty 50 is unlikely to gain significantly ahead of the weekly expiry Thursday, the index is widely expected to remain above its psychologically important 25000 level, derivative analysts said. Traders are betting the 50-stock index to rise to 25300-25500 levels next week. They sold out-of-the-money call options expiring Thursday, but bought some call contracts below the 25500 strike price expiring next week. 

 

Foreign investors added some long positions in index futures amid the recent optimism in the market, primarily on the back of the government's announcement on goods and services tax reforms. The long-short ratio in index futures improved to 15% Tuesday from 11?ay before, a derivatives analyst at a domestic brokerage said. However, their short positions continue to be significantly higher as there were no major improvements in corporate earnings growth, government capital expenditure is yet to pick up, and consumption trends remain muted, analysts said.

 

Traders continued to cover their short positions, the impact of which was also reflected on the Nifty 50's spot level. The index closed the session at 25050.55, up nearly 70 points or 0.3%, closing above the psychologically crucial 25000 level after 17 sessions. Traders also cut some of their long positions as the market is not expected to rise sharply.  

 

On the call side, the highest open interest concentration was at the 25500 strike price, implying that the Nifty 50 may rise towards this level, likely due to a push from banking, information technology, and other heavyweight stocks, derivative analysts said. On the put side, the maximum open interest addition was at four strike prices between 24900 and 25050 levels and the highest open interest concentration was at the 25000 strike price. This indicates that traders expect the Nifty 50 to close above 25000 Thursday.

 

However, among put contracts expiring next week, there was a significant open interest addition seen across 24000-25000 strike prices, which shows the possibility of some near-term pull-back in the index following its strong gains this week. The Nifty 50 has risen over 2% in the past five sessions, buoyed by the government's proposed GST rationalisation.

 

There will be some downside risk for both benchmark indices, Nifty 50 and the Sensex, in the medium term if GST rationalisation fails to meet the intended impact on consumption trends. Indices have risen almost 2% since the government announced the rate rationalisation proposal. However, not all market experts applauded the move, as some of them said this would mean there are fundamental issues with the economy that the government has not directly admitted. Some of them raised fears of potential profiteering by companies, with tax experts suggesting bringing back the GST anti-profiteering provisions. Consumers will likely delay their purchase decisions till the new rates are announced, which could lead to lower-than-expected demand during the festive season, analysts said.

 

--Nifty 50 Aug closed at 25077.00, up 43.50 points; 26.45-point premium to the spot index

--Nifty 50 Sept closed at 25222.10, up 47.50 points; 171.55-point premium to the spot index

--Nifty 50 Oct closed at 25336.00, up 45.80 points; 285.45-point premium to the spot index

 

Infosys, Tata Consultancy Services, Hindustan Aeronautics, Eternal, Reliance Industries, HDFC Bank, Vedanta, ICICI Bank, Bharat Electronics, HCL Technologies, Bharti Airtel, Hindustan Unilever, One 97 Communications, Kalyan Jewellers India, and PG Electroplast were the most active underlying stocks Wednesday.  End

 

Edited by Saji George Titus

 

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