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Informist, Monday, Mar. 9, 2026

 

By Gopika Balasubramanium

 

MUMBAI – The benchmark Nifty 50 index is expected to move in a range in the near term, though some derivative analysts think it will rebound from the current level. The continuing hostilities in West Asia have brought the global oil and gas supply chain to a near-standstill with the Strait of Hormuz effectively closed and crude oil producers in the Persian Gulf region scaling down production, sending prices rocketing to a multi-year high at nearly $120 a barrel during the day.

 

Crude oil prices have cooled a little since to hover near $104 per barrel. Traders have cut long positions at deep out-of-the-money call contracts of the Nifty 50, indicating that the index may fall further or at least face selling pressure at such levels. They also bought put options across strikes, suggesting near-term  weakness in the market.

 

The hostilities in West Asia entered their tenth day Monday with no sign of de-escalation. The US and Israel continue to strike targets in Iran and Tehran still retaliates strongly, attacking US military bases in the region. The main worry for market participants across the globe is the chokehold at Hormuz and the resultant spike in crude oil prices.

 

Asked whether the Nifty 50's movement would be decided by crude oil prices, Sunny Agrawal, head of research at SBICAP Securities, said, "Not 100% correlation. Sanity should return as crude oil prices cool off and/or stabilise. I mean there is panic all around now. As things settle, Street will start differentiating between actually impacted sectors (due to crude oil spike) and spare the sectors which are least affected."

 

On Monday the Nifty 50 settled at 24028.05 points, down 422.40 points or 1.7%, its lowest closing level in 10 months. Earlier in the day, the 50-stock index had fallen over 3% to its lowest level in over 10 months. "...bounceback is expected towards 24500 and 25000 levels; however sell-on-rise approach is intact," Ashish Sherigar, technical and derivatives analyst at NVS Brokerage, said. "On the downside we have a gap between 22923 and 23207... so I expect Nifty (50) to fill this gap."

 

Experts are worried about crude oil prices staying high, especially above $100 per barrel. They say this would make traders adopt a sell-on-rise approach to equities. Last week, derivatives analysts had said traders were refusing to take long positions in the options segment and were betting at strikes with unusually big gaps so as to hedge against a sell-off in the market on account of high crude oil prices.

 

Premiums on contracts expiring Tuesday declined across strike prices with some traders closing long positions at deep out-of-the-money strikes. Premiums on call contracts at 24500, 24800, and 25000 strike prices fell 85-89%. Traders unwound their long positions at deeply out-of-the-money call strikes between 25200 and 25900 points, indicating reduced likelihood of the market rising in the near term. Premiums at these strike prices fell 78-86%. While the highest concentration of open interest was at the 25000-strike call, the maximum addition of contracts was seen at the 24000 call.

 

"Call writing along with put addition was seen at multiple strikes," Vipin Kumaar, assistant vice president, technical and derivatives, Globe Capital Market, said. "Put-call ratio for current week's expiry has turned sideways with immediate support around 23650 spot level and resistance around 24160-24300 spot levels," he said. Asked whether any rebound is expected in the Nifty 50, he said, "At the current juncture, it depends on the news flow from the Gulf region. Options data suggest a sideways session for tomorrow (Tuesday)."

 

Premiums on put options expiring Tuesday rose across out-of-the-money strike prices. Traders added new put contracts at strikes between 23000 and 23500 points. The number of contracts added between these strikes is not less than 1 million at the lower end and not more than 6 million at the higher end. Traders opened 5.5 million new contracts at the 23000 put, suggesting that the Nifty 50 is likely to be dragged down to that level. The highest concentration and maximum addition of open interest were at the 23000 put.

 

--Nifty 50 March closed at 24090.10, down 455.60 points; 62.05-point premium to the spot index

--Nifty 50 April closed at 24,245.00, down 459.00 points; 216.95-point premium to the spot index

--Nifty 50 May closed at 24377.00, down 438.30 points; 348.95-point premium to the spot index

 

HDFC Bank, Reliance Industries, ICICI Bank, State Bank of India, InterGlobe Aviation, Multi Commodity Exchange of India, Axis Bank, Oil and Natural Gas Corp., Larsen & Toubro, Eternal, JSW Steel, Bharat Electronics, BSE, Bank of Baroda, National Aluminium Co., and Hindalco Industries were the most actively traded underlying stocks Monday.  End

 

US$1 = INR 92.32

 

Edited by Rajeev Pai

 

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