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Informist, Monday, Apr. 6, 2026

 

By Simran Rede

 

MUMBAI – Sentiment in the market turned bullish after reports about a proposal for a ceasefire between the US and Iran. Traders added long positions in Nifty 50 call derivatives while selling put contracts across the board, supporting the case for a further rise in the index Tuesday. Analysts, however, expect volatility in the market, given the uncertain nature of the developments in West Asia and the expiry of the weekly contracts of Nifty 50 derivatives.

 

Monday, the Nifty 50 settled at 22968.25, up 255.15 points or 1.1%. The BSE Sensex ended at 74106.85, up 787.30 points or 1.1%. The market gained momentum in the second half of the session following reports that Iran and the US have received a ceasefire plan from Pakistan aimed at ending the war in West Asia. Both the benchmark indices recovered from their early fall to end higher for the third consecutive session on short-covering.

 

As the indices started rising, volatility eased with the India VIX, the market's fear gauge, ending 0.2% lower at 25.4675. Continued selling pressure by foreign investors, high crude oil prices, and global uncertainty have kept investors in a cautious mood, holding them back from making fresh investments in India, analysts said.

 

Additionally, despite correcting from its peak level, the Indian equity market is not yet seen to be attractive compared to equities in Taiwan and China, due to high valuations and lower returns, they said. "We are of the view that the market has completed one leg of the pullback move; hence, buying on intraday corrections and selling on rallies would be the ideal strategy for day traders," Shrikant Chouhan, head of equity research at Kotak Securities, said in a note.

 

Foreign institutional investors have rolled most of their short positions into the April series of the futures contract of the Nifty 50, with net shorts of around 260,000 contracts, the retail side of ICICI Securities said in a report. At the same time, their net selling in the cash market was also extremely high in March, the brokerage said. "We believe gradual short-covering is very likely in the coming sessions which should take the Nifty higher towards 24000 levels in the short term," it added.

 

Tuesday, the Nifty 50 is seen facing resistance at 23000-23450 points and finding support at 22000-21800 points. The Indian equity market is expected to react to the news flow from West Asia and to crude oil prices. Market participants expect the Monetary Policy Committee of the Reserve Bank of India to hold the repo rate at 5.25% at the end of its three-day meeting Wednesday. "Given the deep discount in the broader market, there is meaningful upside potential if a credible ceasefire emerges, despite the prevailing sell-on-rise trend," Vinod Nair, head of research at Geojit Investments, said in a note. 

 

Premiums on 23500-24000 call strikes, which are 2-4% higher than the spot level, fell 26-54% while those on strikes below these levels rose, indicating a limited rise in the index. Premiums across out-of-the-money put contracts fell 50-100%. The maximum addition of open interest was at the 23200-strike call and the 22500-strike put contract.

 

--Nifty 50 April closed at 23050.20, up 283.60 points; 81.95-point premium to the spot index

--Nifty 50 May closed at 23175.50, up 271.30 points; 207.25-point premium to the spot index

--Nifty 50 June closed at 23345.00, up 293.80 points; 376.75-point premium to the spot index

 

Reliance Industries, HDFC Bank, State Bank of India, RBL Bank, ICICI Bank, Axis Bank, Trent, Larsen & Toubro, BSE, InterGlobe Aviation, Multi Commodity Exchange of India, Dixon Technologies (India), Vedanta, National Aluminium Co., Bank of Baroda, Infosys, Bharti Airtel, Bajaj Finance, and Kotak Mahindra Bank were the most actively traded underlying stocks Monday.  End

 

Edited by Rajeev Pai

 

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