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Informist, Monday, Sept. 7, 2026

 

By Eshitva Prakash

 

MUMBAI – Traders purchased near-the-money put options ahead of the Nifty 50 weekly options expiry, reflecting strong conviction that the index will decline at least slightly on Tuesday. High crude oil prices and heightened expectations of an interest rate hike by the US Federal Reserve later this month added to bearish sentiment. While options positioning continues to signal broadly risk-off sentiment, a rise in India VIX on Monday has increased the chances of volatility during the weekly expiry session.

 

Monday, the Nifty 50 ended at 23779.15 points, down 0.5% from Friday. Buying interest in Apollo Hospital, some consumer-facing stocks, and select energy stocks helped prevent a steeper decline. Meanwhile, rising odds of an interest rate hike in the US sent information technology stocks tumbling on concerns that a rate hike will lower discretionary spending of US firms. Metal stocks also ended lower as a lower risk appetite triggered profit booking. The India VIX--Dalal Street's fear gauge--ended 4.5% higher at 11.16 points. At 1615 IST, the November futures contract of Brent crude oil traded 0.5% higher at $96.77 per barrel on the Intercontinental Exchange. 

 

The Nifty 50 September futures contract ended 0.8% lower at 23866.10 points, a premium of 86.95 points from the headline index's closing level. This marked the seventh decline in the contract's value in the last 10 sessions, suggesting the market favours bearish bets. The October and November futures contracts also ended lower. 

 

Traders purchased risky near-the-money put contracts of the Nifty 50, resulting in a 40–100% jump in premiums across 23650-23750 strike prices. Further out-of-the-money contracts expiring Tuesday were sold as buyers squared off positions amid significant theta decay. Options data showed the highest put base at 23750 as immediate support for the headline index. High open interest at 23650–23750 strikes shows a strong support area for the index.      

 

However, market sentiment is likely to remain weak even after Tuesday's expiry, according to put-buyer positioning, which rolled out positions for contracts expiring Sept. 15. Premium at the 23400 strike--expiring Sept. 15--rose by nearly 68%, and at 23500, it was up 74%. Traders also bought further out-of-the-money contracts, albeit at a relatively cheap premium. 

On the other side of the options chain, traders continued to write call contracts, pushing premiums at 23800–24200 strike prices significantly lower. Some inexpensive deep-out-of-the-money contracts were purchased, primarily as a hedging tool. Call contracts expiring Sept. 15 also came under heavy selling pressure. The highest call base at the 23800 strike price, with open interest of over 15 million contracts, will act as a significant hurdle for the 50-stock index. 

 

The broader market rally is becoming stretched, leaving Dalal Street increasingly exposed to supply-chain disruptions and weaker high-frequency macroeconomic indicators, Vinod Nair, head of research at Geojit Investments, said. In the June quarter, higher input costs had little impact on earnings because of strong consumer demand, tax-reduction gains, and product and service price hikes. Going forward, there is a growing risk that these supportive factors may fade, potentially weakening earnings expectations and increasing vulnerability to the broad market rally, Nair said in a note.

 

--Nifty 50 September closed at 23866.10, down 182.00 points; 86.95-point premium to the spot index
--Nifty 50 October closed at 23971.00, down 178.40 points; 191.85-point premium to the spot index

--Nifty 50 November closed at 24079.60, down 182.40 points; 300.45-point premium to the spot index

Reliance Industries, Vodafone Idea, State Bank of India, BSE, HDFC Bank, Infosys, Solar Industries India, Multi Commodity Exchange of India, Bharti Airtel, and ICICI Bank were the most actively traded underlying stocks Monday.  End

 

US$1 = INR 94.49

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

 

Edited by Saji George Titus

 

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