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Informist, Monday, Aug. 25, 2025

By Akash Mandal

MUMBAI – A recovery above the 25000 points looks imminent for the Nifty 50, but the quantum of rise is likely to be capped on caution ahead of the deadline for the 25% additional US tariffs on India due Wednesday. The 25000 strike price of the Nifty 50 call option saw one of the maximum open interest additions and the same put strike saw the highest addition of open interest. Premiums on deep out-of-the-money strike prices across calls and puts declined ahead of a truncated week as the market will be shut on Wednesday on account of Ganesh Chaturthi.

The market's rise in the coming months will be supported by strong macroeconomic conditions, good monsoon, and a likely pick up in earnings growth in the second half of the financial year, analysts said. Reports also suggest the goods and services tax rationalisation may be rolled out as early as the end of September, with Jefferies saying it would offset some of the negative impact from US tariffs and that the government will see only a minimum fiscal hit from the tax reforms. While the government is not overtly concerned about economic growth, the Reserve Bank of India is still expected to deliver more interest rate cuts going forward, NDTV Profit reported, citing Jefferies. 

The 50-stock index will likely trade sideways for the next couple of sessions before rising further, analysts said. "In the near term, particularly on Tuesday, the Indian market may trade sideways as traders await the final verdict on Trump's additional 25% tariff decision on Aug. 27 (Wednesday)," Rupak De, senior technical analyst at LKP Securities, said in a note. De sees the index moving in a range of 24800-25159 levels. 

On the call side, the maximum open interest remained at the 25000 strike price despite traders closing some of their positions at the contract during the session. The 26000 strike price also saw a significant increase in open interest, alongside the 25500 and 25200 strike prices. This implies the Nifty 50 will possibly see a strong upside if it manages to cross the 25500 hurdle. That is still a long way, with the immediate hurdle being 25000 points, derivatives analysts said.

There was short covering on both call and put contracts Monday, which also pushed the spot market higher. The Nifty 50 closed the session 0.4% higher at 24967.75 points. The index had risen above the 25000 level intra-day but failed to close above this level on long unwinding across some deep out-of-the-money call contracts. 

On the put side, the maximum open interest concentration and addition were both at the 25000 strike price, implying that the Nifty 50's rise above this level is imminent. However, there was also significant open interest concentration at the 24900, 24500, and 24000 strike prices, implying that the market may test these levels in case of any negative shock. The put-call ratio increased to around 0.7 Friday from 0.6 Thursday, a derivatives analyst at a domestic brokerage said.

--Nifty 50 Aug closed at 24992.20, up 94.00 points; 24.45-point premium to the spot index

--Nifty 50 Sept closed at 25128.20, up 89.00 points; 160.45-point premium to the spot index

--Nifty 50 Oct closed at 25254.10, up 88.00 points; 286.35-point premium to the spot index

HDFC Bank, Infosys, Reliance Industries, ICICI Bank, Tata Consultancy Services, Axis Bank, Bajaj Finance, Eternal, State Bank of India, Mahindra & Mahindra, Bharti Airtel, Kotak Mahindra Bank, Grasim Industries, Wipro, and Vodafone Idea were the most active underlying stocks Monday.  End

Edited by Saji George Titus

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