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Informist, Wednesday, Aug. 5, 2026

 

By Eshitva Prakash

 

MUMBAI – Traders built bullish positions across the Nifty 50 options chain, encouraged by the sharp fall in Brent crude oil prices over the previous two sessions. However, a sharp rise in call option open interest at near-the-money strike prices suggests the headline index's gains are likely to remain limited in the near term. The revised index closing system also sparked buying interest, as traders hoped the headline index would once again rise from its 1515 IST levels after the end of continuous trading. Limited evidence of broadening inflationary pressures also supported the Reserve Bank of India's decision to keep the policy repo rate unchanged, adding to the overall positive sentiment.

 

The RBI's Monetary Policy Committee unanimously voted to hold the benchmark repo rate at 5.25% and retained the neutral stance. The RBI raised its 2026-27 (Apr-Mar) GDP forecast by 10 basis points to 6.7% and lowered its full-year CPI inflation projection by 10 bps to 5.0%. "I think more than neutral to hawkish, it was neutral to positive. What they've done with inflation and GDP also looks good," a government securities dealer at a state-owned bank said. While the policy decision was largely a non-event for the equity market, which had expected the MPC to maintain the status quo, not all analysts agree with the RBI's positive revision of growth estimates. "We expect growth to moderate to 6.6% from 7.7% in the previous fiscal as higher oil prices, weather-related uncertainties and a softer global environment begin to weigh on economic activity," Dharmakirti Joshi, chief economist at Crisil, said.

 

The Nifty 50 ended flat at 24624.65 points. Metal stocks were in heavy demand with shares of JSW Steel and Hindalco Industries rising around 2?ch. Meanwhile, a fall in shares of heavyweight banks such as HDFC Bank and information technology major Tata Consultancy Services put pressure on the 50-stock index. Automobile stocks continued to perform well, buoyed by healthy June quarter results. At 1609 IST, the October futures contract of Brent Crude oil traded 2% higher at $80.91 per barrel. At y the end of July, the contract was at $90.12 per barrel.

 

Traders sold deep out-of-the-money contracts, even those expiring Aug. 25, indicating limited expectations that the Nifty 50 will decline sharply from the current spot levels. For contracts expiring Tuesday, traders sold put contracts across 24200–24600 strike prices, resulting in premiums at these strikes declining around 30–40%. Maximum put additions were seen at the 24000 strike price, indicating strong support for the index at that level. A heavy open interest buildup at the 24500 strike price also indicates closer-to-spot-level support for the index. 

 

Meanwhile, out-of-the-money call options were in demand with traders. Call contracts with strike prices up to 25200 saw heightened buying interest. Premiums on nearer-to-the-money strike prices such as those in the 24700-24900 range rose 25–30%. Low vega contracts, however, shifted their positions upwards, augmenting the positive sentiment in the market. 

 

Retail major Trent will report its June quarter earnings Thursday. Open interest in call contracts rose significantly, and premiums also rose, indicating expectations of a rise. While some traders sold out-of-the-money calls, these contracts were still expensive, indicating limited put writing and that some traders are holding their put contracts heading into the earnings. 

 

--Nifty 50 August closed at 24637.00, up 81.40 points; 12.35-point premium to the spot index
--Nifty 50 September closed at 24760.00, up 76.50 points; 135.35-point premium to the spot index
--Nifty 50 October closed at 24905.90, up 85.40 points; 281.25-point premium to the spot index

 

HDFC Bank, BSE, Reliance Industries, Multi Commodity Exchange of India, State Bank of India, Kalyan Jewellers India, FSN E-Commerce Ventures, Cummins India, Infosys, and Hindalco Industries were the most actively traded underlying stocks Tuesday.  End

 

US$1 = INR 95.12

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

 

Edited by Saji George Titus

 

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