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Informist, Tuesday, Sept. 1, 2026

 

By Eshitva Prakash

 

MUMBAI – An increase in the pace of call option selling at out-of-the-money strikes of the Nifty 50 index and an addition of short positions indicates negative sentiment among market participants. However, with most open interest present on contracts around the Nifty 50's Tuesday close, it is likely that the headline index will be in range in the near term. High oil prices and concern over cost pressures on the economy and various sectors are driving this negative sentiment, analysts said.

 

Tuesday, the Nifty 50 ended at 24055.80 points, down 24.60 points from Monday, helped off lows partly by auction repricing. The closing auction session, which has led to wide swings in the past, particularly on weekly expiry days, helped the headline index recover more than 75 points from its 1515 IST level, when the continuous trading session ended. The closing auction session also led to a 145.45-point recovery in the Nifty Bank index. Consequently, a rise in call premiums allowed some traders to get a better exit right before expiry.

 

Traders purchased out-of-the-money puts, resulting in a 50–80% increase in premiums across 23700-24000 strike prices. It is unlikely that the Nifty 50 will slip significantly below 24000 points in the near term, several analysts said. However, they were also sceptical of the headline index rebounding from current levels. Deep-out-of-the-money puts were also in demand, and premiums on put contracts across 23500-23650 strike prices rose 40-50%. For contracts expiring Sept. 15, further out-of-the-money puts were also purchased.

 

On the other side of the options chain, traders relentlessly sold call contracts across the options chain of the Nifty 50. Premiums across 24100–24300 strike prices declined over 50%. Further out-of-the-money call options were hit even harder, supporting a bearish view of the market going ahead.

 

The put-call ratio for contracts expiring next Tuesday is at 0.7, indicating slightly negative sentiment among options traders, Vipin Kumar, vice-president of research at Globe Capital Markets, said. He pointed out that the maximum put base was at the 23500 strike and, on the call side, the maximum open interest was built around 24000-24200 strike prices. Multiple supports for the Nifty 50 are placed around the 23950–23800 spot zone, Kumar said, adding that if the headline index manages to breach and sustain above 24200 points, it could rally up to 24380–24400 spot levels in the near term.

 

The options structure of the Nifty Bank also presents a slightly bearish view. Premiums across the 57000-55000 strike prices increased 30–40% Tuesday after the index dropped over 1% to end at 57409.60 points. The index is hovering near its crucial 200-day simple moving average and the relative strength index at around 48 indicates neutral momentum. Hence, 57000 remains an important support zone while the 57800–58000 zone acts as crucial resistance, reinforced by the falling trend line, Vatsal Bhuva, technical analyst at LKP Securities, said. 
 

A sharp decline in shares of pharmaceutical and healthcare companies and select banks weighed on the 50-stock index Tuesday. A rise in stocks of fast-moving consumer goods companies and information technology companies, driven by a mix of value and defensive buying, lent support to the index. Higher-than-expected GDP growth in June helped improve investor sentiment slightly but wasn't enough to outweigh concern of high inflationary pressure in the near term. India's GDP grew 7.8% in the June quarter because of higher growth in the services and manufacturing sectors. The Indian economy grew 8.6% in the March quarter and 6.9% in the year-ago quarter.

 

"Persistent cost pressures may weigh on both corporate earnings and the pace of demand recovery," Vinod Nair, head of research, Geojit Investments, said in a note. "At the same time, higher US bond yields and renewed foreign capital outflows have kept investor sentiment cautious."

 

--Nifty 50 September closed at 24081.00, down 170.40 points; 25.20-point premium to the spot index
--Nifty 50 October closed at 24200.00, down 167.90 points; 144.20-point premium to the spot index

--Nifty 50 November closed at 24314.10, down 173.50 points; 258.30-point premium to the spot index

Reliance Industries, HDFC Bank, Maruti Suzuki India, Adani Enterprises, TVS Motor Co., Steel Authority of India, Bajaj Auto, Adani Energy Solutions, Infosys, and Laurus Labs were the most actively traded underlying stocks Tuesday.  End

 

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

 

Edited by Rajeev Pai

 

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