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Informist, Wednesday, Sept. 3, 2025

By Akash Mandal

MUMBAI – Bullish bets were placed in the options chain of Tata Steel after the stock's sharp rise Wednesday, options data showed. The maximum open interest addition on the call side was at the INR 170-INR 190 strike prices and highest open interest concentration was at the INR 170 strike. Premiums on these strikes rose 500-600%, hinting at further gains. On the other hand, premiums on out-of-the-money put options of Tata Steel more than halved.

"Tata Steel witnessed a bullish breakout on charts setting up targets around INR 175-INR 180 spot levels...options data is also positively biased with immediate strong support at INR 160 spot levels," said Vipin Kumar, assistant vice president of equity research and senior derivatives analyst at Globe Capital Market.

The stock Wednesday rose nearly 6% to close at INR 167.85 on the National Stock Exchange, tracking gains in the overall metal sector after China said it is set to reduce its steel capacity and production to curb excess capacity. Analysts maintain a positive view on the metal sector due to favourable factors such as a likely pickup in the government's capital expenditure and the goods and services tax rationalisation, which are likely to further spur demand.

China will lower its steel capacity by 50 million tonnes in 2025 and cut production by 8.5% for the rest of the year, global brokerage firm CLSA said. The brokerage house sees the spreads improve across the sector and the profitability of Indian mills rise. CLSA said the "worst looks behind" for the sector, but the focus remains on capacity cuts in China. Shares of other steel makers such as Jindal Steel and Steel Authority of India rose over 5% each.

"Notwithstanding the slowdown in global steel consumption, domestic steel consumption remains solid...we attribute the strength to burgeoning demand from the construction and infrastructure segments, boosted by the Rs 11.1 lakh crore (INR 11.1 trillion) infrastructure pipeline announced in Budget 2025-26," Systematix Institutional Equities said in a report Tuesday. The brokerage remains positive on the sector due to select players implementing effective actions to mitigate risks related to commodity and raw material price as well as attractive valuations.

Gains in metal stocks Wednesday contributed to 0.1% rise in the Nifty 50, which closed 0.6% higher at 24715.05 points. Strong performance of index heavyweight information technology and banking stocks may push the Nifty 50 to the 25000 levels. However, analysts still maintain a "sell-on-rise" view on the market.

In the options chain of the Nifty 50, premiums across put contracts expiring next week declined sharply but those on some out-of-the-money calls rose, indicating near-term optimism. On the put side, the maximum open interest addition as well as concentration remained at the 24500 strike, which is likely to act as a strong support for the Nifty 50.

"Nifty (50) options chain is indicating slightly positive sentiments as put writing was seen at multiple strikes with maximum addition at 24500-24600 strikes," Kumar of Globe Capital said. "...We continue to uphold our sell-on-rise trading approach till the time Nifty (50) index is holding below 24850 spot levels on closing basis," he added.

The market is likely to consolidate in the near term while the bias is likely to remain positive. Factors that could limit the rise are persistent worries about US tariffs, no major growth in corporate earnings, weakness in the Indian currency, selling pressure from foreign investors, and lower returns from the market, analysts said.

--Nifty 50 Sept closed at 24820.00, up 128.20 points; 104.95-point premium to the spot index

--Nifty 50 Oct closed at 24931.40, up 122.50 points; 216.35-point premium to the spot index

--Nifty 50 Nov closed at 25049.00, up 122.50 points; 333.95-point premium to the spot index

Tata Steel, HDFC Bank, Indus Towers, ICICI Bank, Eternal, Reliance Industries, Hindalco Industries, Axis Bank, One 97 Communications, Infosys, Mahindra & Mahindra, Kotak Mahindra Bank, RBL Bank, Tata Consultancy Services, and Jindal Steel were the most active underlying stocks Wednesday.  End

Edited by Ashish Shirke

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