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Informist, Tuesday, Jul. 28, 2026

By Eshitva Prakash

MUMBAI – After an uneventful monthly expiry Tuesday, traders sold both call and put contracts of the Nifty 50 weekly options expiring Aug. 4. Heavy open interest build-up around spot levels, particularly on the call side, indicates that the 50-stock index will continue to consolidate in the near term. Large short positions on the Nifty Bank index, however, indicate that the headline index may be under pressure from banking stocks, while build-up of long positions in select information technology and realty stocks will provide support, analysts said.

June quarter earnings and the price of crude oil will likely decide sentiment among traders. The US Federal Reserve's interest rate decision, due Wednesday, will also be monitored for commentary on inflation amid the war in West Asia. Officials Monday said Qatar and Pakistan continue to mediate between the US and Iran to come to a peace agreement, The Associated Press reported. US President Donald Trump Tuesday said Washington is having "very friendly talks" with Tehran but added that he is not prepared for prolonged negotiations.

Tuesday, the Nifty 50 ended almost unchanged from Monday at 23985.35 points. Throughout the day, traders sold call and put contracts across strike prices with low delta. Implied volatility around contracts with the highest open interest hovered around the India VIX level, which fell nearly 1% to 12.56 points. IT stocks continued to be among the biggest gainers for the second session amid a global sell-off in artificial intelligence stocks. Domestic information technology stocks are relatively insulated from the artificial intelligence trade, which some brokerages such as Jefferies say is losing momentum. The global brokerage Monday upgraded its stance on the Indian IT sector to "neutral" from "underweight". It also added shares of Infosys to its model portfolio and increased its weightage on Coforge.

"Tuesday's trading was unexpectedly quiet, and it was quite a non-event date," Rupak De, senior technical analyst at LKP Securities, said. He said that until the Nifty 50 tests the 24050 level, fresh buying interest is unlikely. The analyst sees the Nifty 50 finding support at 23600 points and facing resistance at 24500 in August. For the remainder of the week, he expects the Nifty 50's movement to be range-bound to slightly positive.

Deep out-of-the-money call and put contracts were sold aggressively by traders despite a sizeable theta. The largest concentration of call and put contracts was at the 24000 strike price. Premiums across deep-out-of-the-money call contracts fell sharply. Even at-the-money calls with their high delta were not spared. Put contracts across 23000-24000 strike prices were also sold relentlessly.

Traders opened fresh short positions on the Nifty Bank index. Premiums across 55000-56500 strike prices rose 10-16% and implied volatility at near-the-money contracts among these strikes also jumped, indicating a bearish set-up overall. Meanwhile, call options across 58000-60000 strike prices were sold significantly, with premiums on the contracts declining over 20%. Meanwhile, traders have built a net long position on Coforge, Lodha Developers, and Kalyan Jewellers. De said these stocks also look good on the technical charts with momentum favouring further upside.

Two Adani Group companies, Adani Enterprises and Adani Ports and Special Economic Zone, will report their June quarter earnings Wednesday. Traders built short positions on the options of Adani Enterprises, with premiums across INR 2,800 to INR 2,900 put contracts rising sharply. A correction to INR 2,800 implies a downside of nearly 7% for the stock. Traders are also mostly negative on Adani Ports. Some near-the-money call options were purchased, but further out-of-the-money call contracts were sold. Some traders rotated their put contracts to lower strike prices, indicating a bearish outlook. Premiums at INR 1,760 strike price declined nearly 5%, while higher demand for the INR 1,680 put option pushed premiums at the strike price nearly 9% higher. Adani Ports is expected to report the weakest year-on-year growth in 14 quarters in its consolidated bottom line for the June quarter. Its consolidated net profit is expected to grow a paltry 1.8% on year to INR 33.75 billion and its revenues for the reporting quarter are seen at INR 105.61 billion, up 16% on year.

Eicher Motors will also report its earnings Wednesday, which analysts expect to be healthy. Robust growth in wholesale sales of its Royal Enfield motorcycles and price hikes by the company are likely to drive earnings growth. Its consolidated net profit is forecast to grow almost 15% on year to INR 13.80 billion. The company is expected to report a consolidated revenue of INR 63.63 billion for the June quarter, which would imply a year-on-year growth of 26%. Reflecting this positive outlook, traders covered their short positions on the stock's options Tuesday and purchased call options at deep-out-of-the-money call contracts. Owing to a high theta, premiums for contracts up to INR 8,500 surged. The highest open interest build-up was seen at INR 8,000, which is nearly 3% higher than the stock's closing price Tuesday.

Asian Paints completes the list of Nifty 50 companies releasing their June quarter results Wednesday. Options data showed traders are split about where the company's stock will head. Expensive call contracts for up to INR 3,000 strike price were bought relentlessly. Put options across INR 2,500-INR 2,460 strike prices were also bought. Since the implied volatility across call and put options is quite large, holders of either contract can get liquidated quickly. Asian Paints is expected to report robust earnings growth for the June quarter, driven by healthy demand, dealers stocking up ahead of price hikes, and an extended repainting season due to the delayed monsoon. Its consolidated net profit is estimated at INR 12.63 billion for the June quarter, up nearly 15% from a year ago. The company's revenue is expected at INR 101.80 billion, up nearly 14% on year.

--Nifty 50 July closed at 23983.20, down 44.80 points; 2.15-point discount to the spot index

--Nifty 50 August closed at 24120.10, up 18.30 points; 134.75-point premium to the spot index

--Nifty 50 September closed at 24260.00, up 22.80 points; 274.65-point premium to the spot index

Infosys, Reliance Industries, HDFC Bank, ICICI Bank, Hindustan Unilever, Varun Beverages, Coforge, Tata Consultancy Services, Vodafone Idea, and Bharat Electronics were the most actively traded underlying stocks Tuesday.  End

Edited by Rajeev Pai

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