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Informist, Tuesday, Aug. 26, 2025

By Akash Mandal

MUMBAI – The Nifty 50 may test the 24500-24600 levels in the coming sessions as traders remained cautious about the additional 25% US tariff which will take effect Wednesday and its impact on the domestic economy. Traders unwinded some of their long positions across both call and put strike prices. Analysts expect a sharp downside if the Nifty 50 falls below the 24650 levels. Premiums on out-of-the-money call contracts decline and those on puts rose, indicating at the near-term fall for the index.

"I am expecting it (Nifty 50) to come down to 24650 spot levels that will act as immediate temporary support on the down side...there might be further downside if the level is breached," said Vipin Kumar, assistant vice president of equity research and senior derivative analyst Globe Capital Market. Amid the tariff woes, the Nifty 50 Tuesday closed 1% lower at 24712.05 points.

In addition to tariff-related concern, investors were also worried about the expensive stock valuations and the depreciation in the rupee, which have been making foreign investors offload Indian equities for four months now. FIIs have net sold over INR 280 billion of shares so far in August. India is the most expensive among emerging equity markets and trades at a 60% premium to its peers, HSBC had said in its strategy report Monday.

"US' notice to increase tariff to 50% on Indian exports as deadline ends today puts additional pressure on Indian markets...fresh call writing at 24800 and higher strikes along with put unwinding at multiple strikes is adding pressure on minor bounce," Kumar added. "FIIs long-short ratio has improved marginally from its recent lows but is still a cause of concern...options data also showing negative sentiments for benchmark index," Kumar said. 

Traders sold many contracts below the 26000 call strike prices. Buying was seen above these contracts likely for hedging purposes. The maximum open interest concentration remained at the 25000 call strike price, followed by the 24800 and 25200 strikes. Traders also exited some of their positions across deep out-of-the-money call contracts. 

The put options side indicated at near-term bearishness, with premiums on out-of-the-money put conracts surging. The maximum open interest addition at strike prices at 23850-24700 and the maximum open interest concentration shifting to the 24000 strike price from 25000 contract. 

--Nifty 50 Aug closed at 24724.10, down 265.60 points; 12.05-point premium to the spot index

--Nifty 50 Sept closed at 24856.30, down 266.50points; 144.25-point premium to the spot index

--Nifty 50 Oct closed at 24985.60, down 265.70 points; 273.55-point premium to the spot index

HDFC Bank, Reliance Industries, Eternal, ICICI Bank, Infosys, Tata Consultancy Services, Axis Bank, State Bank of India, Bharti Airtel, Kotak Mahindra Bank, Mahindra & Mahindra, Bajaj Finance, Maruti Suzuki India, Hindustan Unilever, and Tata Motors were the most active underlying stocks Tuesday.  End

Edited by Akul Nishant Akhoury

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