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Informist, Tuesday, Sept. 23, 2025

 

By Akash Mandal

 

MUMBAI – Premiums across out-of-the-money call and put options of the Nifty 50 expiring next week declined sharply on expectations of consolidation of the index in upcoming sessions. A trade deal between the US and India or fresh trade policy announcements by US President Donald Trump could trigger a sharp movement, derivatives analysts said.

 

There is optimism that the goods and services tax cuts will boost consumption demand during the festival season that is underway. Some analysts, however, see the impact being limited to sectors such as autombiles and consumer durables. Automobile stocks ended higher Tuesday with media reports that dealerships and companies reported sharply higher footfalls and enquiries on the first day of the tax rate cuts kicking in.

 

Losses in fast-moving consumer goods stocks negated the impact of gains in shares of automobile companies. Tuesday, the Nifty 50 closed at 25169.50 points, down almost 33 points or 0.1%. "We believe that the intra-day market texture is volatile and non-directional; hence, level-based trading would be the ideal strategy for day traders," Shrikant Chouhan, head of equity research at Kotak Securities, said in a note. 

 

Traders sold out-of-the-money call contracts across strikes of the Nifty 50, indicating that sentiment is likely to remain cautious next week, especially amid higher uncertainty about policies in the US. The highest addition of open interest was at 25200 and 25500 strikes, which are likely to act as immediate hurdles for the Nifty 50. The maximum concentration of open interest of over 10 million was at the 26000 strike, followed by 9.6 million in the 25500 call option.

 

Among put options expiring Sept. 30, traders sold out-of-the-money strikes on expectations that the index is unlikely to see a sharp correction. The highest addition of open interest was at the 25000-25200 strikes as traders expect the 50-stock index to hold above these levels in the near term. The highest concentration of open interest was at the 25000 strike. 

 

The intensity of earnings cuts has eased due to the steps taken by the government to improve demand, and the latest reduction in estimates has been the smallest in four quarters, Motilal Oswal Financial Services said in a strategy report Tuesday. "A better earnings cycle, decent valuations, and a base of underperformance set the stage for potential up-move in market and valuation expansion for Indian markets," the brokerage said in the report.

 

--Nifty 50 September closed at 25252.00, down 25.70 points; 82.50-point premium to the spot index

--Nifty 50 October closed at 25384.10, down 19.30 points; 214.60-point premium to the spot index

--Nifty 50 November closed at 25518.50, down 14.60 points; 349.00-point premium to the spot index

 

Reliance Industries, Maruti Suzuki India, Axis Bank, State Bank of India, HDFC Bank, Adani Enterprises, ICICI Bank, Adani Green Energy, Bajaj Finance, Infosys, Mahindra & Mahindra, Vodafone Idea, Trent, Tata Motors, and Kotak Mahindra Bank were the most active underlying stocks Tuesday.  End

 

Edited by Rajeev Pai

 

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