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Informist, Monday, Aug. 3, 2026

By Eshitva Prakash

MUMBAI – Traders added to long positions on the options contracts of the Nifty 50 index as a fall in crude oil prices and stronger-than-expected June quarter earnings boosted risk appetite. Despite a sharp theta decay across options contracts ahead of the weekly expiry on Tuesday, investors were willing to add to their long positions and purchase low-delta contracts. They continued to sell put options, several of whose contracts have a high implied volatility, indicating that the market may face jitters Tuesday, but the overall sentiment is expected to remain bullish.

Traders purchased more call options of the Nifty 50, with premiums across 24800–25100 contracts rising significantly, albeit premiums assigned to these contracts were quite low. The open interest at the 24600 strike price was sharply higher than other call contracts, initially indicating strong resistance for the headline index at this level. However, at the time the continuous trading of Nifty 50 stocks ended, the Nifty 50 was far below this level, but managed to breach this level after post-auction settlement. Market participants are confused over directional bets and where the market will open Tuesday. Reflecting this confusion, the August contract of the Nifty 50 ended at a 109.40 point discount to the spot level despite bullish sentiment throughout the session.

"Put writing was seen at multiple strikes along with call addition at out-of-the-money strikes. Maximum positions are at 24600 CE (call) and 24500 PE (put)," Vipin Kumar, assistant vice president of research at Globe Capital Market, said. The put-call ratio for the current week's expiry is around 1.50, which indicates slightly overbought positions, he added. The analyst suggested a buy-on-dips trading approach as long as the index remains above 24400 spot levels on a closing basis.

The Nifty 50 closed at 24774.30 points, up 1.6% from Friday. At the time of the conclusion of the continuous trading session, the Nifty 50 had risen 0.8% to 24573.35 points. Shares of crude-sensitive companies provided strong support to the headline index, with Interglobe Aviation and major automobile stocks rising sharply. Information technology stocks outperformed the headline index after a fall on Friday as traders, miffed with artificial intelligence, rotated to this sector. A rise in private banks also aided the Nifty 50 index.

The price of the October Brent Crude oil futures contract fell sharply after US President Donald Trump said an agreement with Iran is imminent, with negotiations starting Monday. Adding to caution, however, Iranian Foreign Ministry spokesperson Esmaeil Baghaei Tuesday said there are no plans to receive or send an Iranian delegation.

Another factor for investor enthusiasm was the resilient performance of domestic companies in the June quarter. Brokerage Motilal Oswal said the cumulative earnings of the companies under its coverage inched up 2% on year, far better than its expectations of a 10% on-year fall. Barring oil marketing companies, whose earnings have faced the brunt of the war in West Asia, earnings of companies under its coverage rose 17% on year, higher than its initial expectations of a 13% rise. The overall earnings growth was led by banking, financial services, and insurance, metal technology, and automobile companies.

Telecommunication major Bharti Airtel will release its earnings Tuesday. Heading into the June quarter earnings, traders have bought deep-out-of-the-money put contracts on the derivative and some also unwound their long positions. Traders were also hesitant to hold call contracts, pushing down premiums across INR 1,980–INR 2,000 strike prices, down 10-12%. Meanwhile, premiums on put contracts up to INR 1,900 rose nearly 17%. Monday, shares of the company ended slightly lower at INR 1,970.50 on the National Stock Exchange. Revenues of the company are expected to rise moderately on the back of new subscriber additions. The telecommunications major's consolidated net profit for the June quarter is expected to rise nearly 17% sequentially and almost 44% on year to INR 85.51 billion. The Delhi-based company's consolidated revenues are expected to grow 3.4% sequentially and nearly 16% on year to INR 572.89 billion.

Oil and Natural Gas Corp. will also release its June quarter earnings Thursday. Heavy open build-up around the company's spot prices indicates a range-bound session for the stock. However, a higher implied volatility in put contracts than on the call side shows a negative bias. Cheap premium puts were in steady demand and other out-of-the-money contracts also witnessed some buying interest.   

--Nifty 50 August closed at 24664.90, up 212.30 points; 109.40-point discount to the spot index
--Nifty 50 September closed at 24770.10, up 202.60 points; 4.20-point discount to the spot index
--Nifty 50 October closed at 24895.00, up 196.70 points; 120.70-point premium to the spot index

Muthoot Finance, One 97 Communications, Divi's Laboratories, Maruti Suzuki India, Bajaj Finance, Infosys, ABB, Dixon Technologies (India), and Jio Financial Services were the most actively traded underlying stocks Monday.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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