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Informist, Wednesday, Aug. 26, 2026

 

By Eshitva Prakash

 

MUMBAI – A sharp divergence between the Nifty 50's level at the end of the continuous trading session and the closing auction session prompted large-scale selling of call contracts in the final minutes of futures and options trading Wednesday. Despite broadly positive macroeconomic and global market cues, a large increase in open interest near spot levels of the 50-stock index indicates the possibility of a slow-moving, range-bound market. 

 

Wednesday, the Nifty 50 closed at 24207.75 points, down 126.80 points or 0.5%. At the end of the continuous trading session at 1515 IST, the index was down 0.2% from Tuesday at 24276.90 points. Despite opening slightly higher, weakness in information technology stocks and select fast-moving consumer goods stocks dragged the headline index lower. A decisive break below the 24200 level could lead to further correction towards 24000 points, several technical analysts said. Analysts see the 50-stock index facing resistance at 24300–24350 points. 

 

"Inflation concerns receded on tempered US sanctions on Iran, easing domestic bond yields and lifting banking stocks, while metals gained on better realisation prospects, Vinod Nair, head of research at Geojit Investments, said in a note. Information technology stocks fell after the US paused visa appointments amid an immigration crackdown, which raised concerns about the profitability of IT companies.

 

Generally, the Nifty 50 adjusts to a sudden auction repricing when the market opens. If this trend is to hold true Thursday, the headline index will likely open higher before hefty writing around spot prices forces another slow-moving market. The closing auction session, implemented Aug. 3, has often resulted in divergence between Nifty 50 and BSE Sensex levels, gamma blasts around the final moments of trading, and thin liquidity.  

 

Premiums of call contracts were the hardest hit due to this repricing while contracts on the other side of the options chain became more intrinsically valuable. With six more days to go until expiry, the sharp decline in premiums on the call side is a break from traditional trading. Premiums of call contracts across 24250-24450 strike prices, which had among the highest open interest, declined 20–30%. At 1514 IST, the call contract at the 24400 strike was priced at INR 90.80. At 1515 IST, the premium had declined to INR 90.80 as traders exited positions on fear of a sharp auction repricing hurting their margin further. Their fears were well-founded, as the premium of the call contract closed at INR 73.80 by the end of the trading session.

 

On the other side of the options chain, premiums at the 24200 strike price ended at INR 57.95, sharply up from INR 44.75 at 1514 IST. Premiums on some near-the-money put options across 24000-24200 strike prices rose. Further out-of-the-money put contracts expiring Sept. 1 were sold. The highest call base was at 24500 strike price, followed by 24400 strike price--which will act as the immediate resistance for the 50-stock index. The highest put base at 24200 strike price indicates support for the headline index.
 

Bulls failed to sustain follow-up buying Wednesday, keeping sentiment cautious. The index continues to face resistance around its 20-day double exponential moving average. A sustained breakout above this key hurdle would be essential to trigger a further rise. Until then, the index is likely to witness some choppiness and consolidation, Osho Krishan, chief manager of technical and derivative research at Angel One, said in a note.

 

--Nifty 50 September closed at 24420.00, down 51.70 points; 212.25-point premium to the spot index
--Nifty 50 October closed at 24553.50, down 36.90 points; 345.75-point premium to the spot index

--Nifty 50 November closed at 24665.00, down 36.50 points; 457.25-point premium to the sport index

HDFC Bank, Steel Authority of India, Reliance Industries, BSE, Hindustan Zinc, ICICI Bank, Varun Beverages, Kotak Mahindra Bank, State Bank of India, and Shriram Finance were the most actively traded underlying stocks Wednesday.  End

 

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

 

Edited by Rajeev Pai

 

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