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Informist, Tuesday, Sept. 2, 2025

 

By Akash Mandal

 

MUMBAI – The Nifty 50's fall Tuesday is likely to be temporary, with the downside seen to be limited in upcoming sessions, going by options data. The Nifty 50 options contracts' expiry, shifted to Tuesday from Thursday earlier, saw a truncated week in terms of adjusting positions. On the put side, the highest addition of and concentration in open interest was at the 24500 strike price, with analysts pegging this level as strong support for the 50-stock index. Traders also bought the 24600-24800 put contracts expiring next week. 

 

The Nifty 50 ended Tuesday at 24579.60 points, down 45.45 points or 0.2% amid a volatile session. The index had risen 0.5% in early trade as investors covered some of their short positions across some out-of-the-money put strikes. However, traders scrambled to take some profits and unwind long positions towards the end of the trading session, pushing the spot index slightly lower.

 

"The Nifty 50 opened on a flat note but witnessed a short-covering-led upmove in the early part of the session, scaling an intraday high of 24756...," Bajaj Broking said in a note. "However, the index failed to sustain higher levels amid selling pressure at resistance zones." The index is likely to continue to consolidate in the range of 24400-24800 points, the broking firm added. Most technical and derivatives analysts still remain cautious about the market and advise a "sell-on-rise" approach.

 

On the call side, the highest addition of and concentration in open interest was at the 25000 strike. Traders added short positions at this strike price, implying that the Nifty 50 is unlikely to surpass this psychologically crucial level in the near term. The 24600-24800 strikes also saw significant addition of open interest, which suggests that gains in the Nifty 50 are likely to be capped going forward. 

 

Stretched valuations in the market and depreciation of the rupee against the dollar have resulted in persistent selling by foreign investors, which has weighed on domestic equities in recent times. However, on a fundamental level, many analysts are optimistic about Indian equities in the longer run. "Despite global headwinds, Indian equity markets are expected to remain robust, supported by strong domestic investor support and limited direct impact from US tariffs on the earnings of listed companies," IDBI Capital said in a report. However, a pickup in earnings growth will be key to lift investor sentiment.

 

While frontloading of exports ahead of US tariffs led to sharply higher-than-expected GDP growth in the June quarter, analysts said high US tariffs are likely to eventually weigh on the country's growth. "We expect the impact of the 50% US tariffs to reflect on economic activity largely from 3QFY26 (Oct-Dec) onwards," Kotak Institutional Equities said. While the effective tariff rate is lower at 33%, an annualised 50-100 basis-point impact is estimated on India's real GDP growth if high tariffs persists, the brokerage added.

 

--Nifty 50 Sept closed at 24682.20, down 65.80 points; 102.60-point premium to the spot index

--Nifty 50 Oct closed at 24800.00, down 74.00 points; 220.40-point premium to the spot index

--Nifty 50 Nov closed at 24914.50, down 76.10 points; 334.90-point premium to the spot index

 

Reliance Industries, HDFC Bank, Eternal, Mahindra & Mahindra, ICICI Bank, BSE, Hero MotoCorp, Sammaan Capital, Tata Motors, Bharat Electronics, One 97 Communications, Infosys, Dabur India, Bajaj Auto, and Multi Commodity Exchange of India were the most active underlying stocks Tuesday.  End

 

Edited by Rajeev Pai

 

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