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Informist, Monday, Aug. 31, 2026

 

By Eshitva Prakash

 

MUMBAI – The Nifty 50 is likely to rise in early trade Tuesday, owing to heavy put writing near its critical support. However, a rebound is likely to be short-lived due to high oil prices amid the expiry of weekly derivative contracts of the headline index, analysts said. Additionally, increased demand for negative-delta options suggests that some traders expect the Nifty 50 to fall below its critical support level. Negative market sentiment, combined with derivatives positioning for Tuesday, points to a highly volatile market.

"Brent Crude oil (futures) rose above its 50-day exponential moving average, which has substantially increased the chances of the Nifty 50 slipping below 24000 points," Rupak De, senior technical analyst at LKP Securities, said. "Overall sentiment in the market is negative and... factor(ing) in MSCI rebalancing flows and the (repricing during the) closing auction session, any rise will get sold into," he said. However, the Nifty 50 ended over 30 points higher after the closing auction session, leading to a positive divergence on the relative strength index and indicating a possible near-term rise.

 

The November futures contract of Brent Crude oil was up over 3% at $90 per barrel on the Intercontinental Exchange at 1607 IST. Oil prices rose after the US struck two launchers on Iran's Larak Island in the Strait of Hormuz, which invited retaliation by Tehran, which said it had struck US air bases in Jordan. A rise in oil prices led to a jump in government bond yields across regions and raised concerns about a high-interest-rate environment. The US Federal Reserve Chair Kevin Warsh's statements in the Jackson Hole symposium increased expectations of a potential rate hike in September, also weighing on equity markets. 

 

Open interest at the highest put base of 24000 strike price rose by nearly 7 million contracts to over 17 million. Premium on the contract rose over 25%, but put writers kept it in check by defending the key support level despite weak market sentiment. Premiums of puts at 24050 and the 23950 strikes also rose. Already expensive deep-in-the-money puts expiring after Tuesday saw buying interest again, reinforcing the negative view among traders. 

 

On the other side of the options chain, traders continued to sell call options across strike prices. Premiums at the highest call base of 24100 strike price declined nearly 64%. Premiums across 24200–24500 strike prices declined 60–80%. Call contracts dated for later expiry also came under significant selling pressure.

 

The Nifty 50 ended 0.4% lower from Friday at 24080.40 points. Stocks of companies in defensive sectors with relative immunity to oil prices, such as pharmaceuticals and healthcare, rose sharply. Meanwhile, metal and consumer-cyclical stocks were among the worst hit. Stock-specific buying in the broader market supported a recovery from intraday lows, aided by expectations of healthy June quarter GDP growth, festive-led demand, and better GST collections, Vinod Nair, head of research at Geojit Investments, said.

 

The Nifty Bank index ended 0.9% higher after a sharp repricing during the closing auction session. At 1515 IST, when the closing auction session ended, the Bank Nifty was at 57397.35 points, down 0.2% from Friday. LKP Securities' De suggested traders participate in trading derivatives of the sectoral index with a proper strategy, since "the current (trading) environment is that of a speculation game," he said. Shares of Axis Bank and ICICI Bank jumped during the closing auction session, pushing the sectoral index sharply higher.

 

Stocks such as Bharti Airtel, ITC, Adani Ports and Special Economic Zone, and Adani Enterprises, which ended at the bottom of the Nifty 50 index, were all hit hard by cheap bids during the closing auction session.

 

--Nifty 50 September closed at 24245.00, down 96.90 points; 164.60-point premium to the spot index
--Nifty 50 October closed at 24361.00, down 93.40 points; 280.60-point premium to the spot index

--Nifty 50 November closed at 24471.20, down 99.50 points; 390.80-point premium to the spot index

Eternal, Reliance Industries, Laurus Labs, Adani Enterprises, Adani Energy Solutions, BSE, Bharti Airtel, ICICI Bank, SBI Cards and Payment Services, and Adani Ports and Special Economic Zone were the most actively traded underlying stocks Monday.  End

 

US$1 = INR 95.16

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

 

Edited by Saji George Titus

 

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