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Informist, Tuesday, Sept. 16, 2025

 

By Anshul Choudhary

 

MUMBAI – Traders covered their short positions and added long positions as the Nifty 50 ended at its highest closing level in over two months. Hopes of rate cuts in the US this week also pushed traders to cut short positions.

 

The short covering was most likely by foreign investors. Till last week, foreign institutional investors had net short positions of $3.67 billion, according to data by Nuvama Institutional Equities. Several analysts had last week said that foreign investors would cut their short positions if the market rises.

 

The Nifty 50 Tuesday ended 0.7% higher at 25239.10 points--the highest closing level since Jul. 10--on hopes that lower Goods and Services Tax rates from next week may push demand for bank credit and lead to rise in consumption. Media reports of a sharp rise in inquires for automobiles also aided the gains in the market.

 

"All ears will be on guidance and way forward (by US Federal Reserve), an unexpected dovish guidance may create a meltup like scenario in US and may benefit cheap emerging markets like China and Korea. On the other hand, hawkish stance and limited scope of further policy action may spark a classic sell on news kind of trade in US," Ankita Pathak, macro strategist and global equities fund advisor at Ionic Asset, said in a note. "Back home (India), all eyes will be on FII flows which can be helped by lower dollar, earnings and RBI action ahead."

 

In the case of call options expiring next week, traders added long positions at out-of-the-money strike prices and covered short positions at in-the-money strike prices. The highest open interest addition was seen at 26000 strike price, followed by 25200-25300 strike prices. Open interest indicates major gains are unlikely this week as the Nifty 50 may face resistance at 25300 points.

 

Put options suggest the Nifty 50 is expected to at least maintain gains with low likelihood of profit booking. The highest open interest addition on the put side was at 25100-25200 strike prices and these levels may act as support for the Nifty 50. Traders sold put options across the board, indicating bullish sentiment.

 

The September futures contract of the Nifty 50 closed at a premium of 112 points to the spot index Tuesday. Open interest in the contract fell nearly 3% to 16.22 million, according to provisional data.

 

--Nifty 50 September closed at 25351.10, up 186.40 points; 112-point premium to the spot index

--Nifty 50 October closed at 25468.90, up 184.90 points; 229.80-point premium to the spot index

--Nifty 50 November closed at 25588.00, up 184.30 points; 348.90-point premium to the spot index

 

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

 

Edited by Ashish Shirke

 

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