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Informist, Friday, Dec. 5, 2025

 

By Anjana Therese Antony

 

MUMBAI – The Reserve Bank of India's interest rate cut drove bulls to the derivatives chain of the Nifty Bank index, with them placing aggressive bets in out-of-the-money call strikes expiring at the end of the month. They also added long positions to the futures series of the banking index, indicating a near-term optimism. In addition to the rate cut, the upward revision in economic growth projection for the current financial year, the downward revision in CPI forecast, and the possibility of another rate cut cheered equity investors, pushing the benchmark indices and the Nifty Bank index higher. 

"Tactically calibrated and flexible forward guidance has also complemented today's rate easing, signalling RBI's openness to further easing – both on rates and liquidity," Madhavi Arora, chief economist at Emkay Global Financial Services, said in a note. Acknowledging repeated undershooting of inflation, the RBI governor conceded that, adjusted to gold prices, underlying price pressures are even more subdued, Arora said. 

The Nifty Bank closed almost 1% higher at 59777.20 points Friday, extending its gaining run for the sixth week in a row. Support for the Nifty Bank is seen at 59300-59000 levels and resistance at 60000-60300, a derivatives analyst at a domestic broking firm said. 

 

In the options chain of the Nifty Bank expiring on Dec. 30, premiums on out-of-the-money call strikes 60100-62000 rose 16-34% and those on put options 59500-58000 declined more than 36%. The highest open interest additions were at the 62500-point call and the 60000-point put options. The maximum concentration of open interest was at the 60000 call strike and the 59500 put option. 

 

On Friday, the RBI's Monetary Policy Committee voted unanimously to cut policy repo rate by 25 basis points to 5.25% while retaining the neutral stance, taking the total rate cuts in 2025 to 125 bps. The reduction in the key interest rate is expected to put limited pressure on margins of private and public sector banks and could help reduce the borrowing costs of non-banking financial services companies, analysts tracking the sector said.  

 

--Nifty 50 December closed at 26335.00, up 148.50 points; 148.55-point premium to the spot index
--Nifty 50 January closed at 26499.30, up 148.80 points; 312.85-point premium to the spot index
--Nifty 50 February closed at 26640.00, up 147.50 points; 453.55-point premium to the spot index

 

InterGlobe Aviation, Kaynes Technology India, State Bank of India, Reliance Industries, Hindustan Unilever, Vedanta, HDFC Bank, Bajaj Finance, Infosys, Shriram Finance, ICICI Bank, Tata Consultancy Services, Vodafone Idea, Adani Enterprises, and Punja National Bank were the most actively traded underlying stocks Friday.  End

 

Edited by Saji George Titus

 

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