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Informist, Wednesday, Dec. 17, 2025

 

By Simran Rede

 

MUMBAI – Barely had the market cheered the all-time high of the benchmark Nifty 50 index than the weakening rupee, the continued delay in signing of a trade deal between India and the US, and prolonged outflow of foreign investments combined to trigger a downward slide. The Nifty 50 fell for the third consecutive session Wednesday, leading to bearish bets being placed in the options chain of the benchmark index.

 

The 50-stock index had hit its all-time high of 26325.80 points on Dec. 1. However, the index started its downward journey almost immediately thereafter because of continued depreciation of the rupee vis-a-vis the dollar. The rupee continues to hover near its record lows despite the Reserve Bank of India's efforts to prop it up. The Indian unit closed at 90.3800 a dollar, against Tuesday's close of 91.0275 a dollar, moving in a range of over 100 paise during the day. Tuesday, it had fallen to an all-time low of 91.0775 a dollar.

 

The Indian currency is expected to fall to as much as 91.50-92.00 a dollar in the absence of a trade deal with the US but is unlikely to weaken beyond that, RBL Bank's Head of Treasury Anshul Chandak told Informist Wednesday. A favourable trade deal may pull the Indian currency back to the 87.50-88.00 level, Chandak said. Currency market participants see a reduction in US tariffs on Indian goods to 15-20% as a favourable trade deal.

 

Tuesday, the chief negotiators from India and the US concluded their discussions on the proposed Bilateral Trade Agreement. The remaining issues now require intervention at the ministerial level, a commerce ministry official told Informist. Last week, the government's Chief Economic Adviser V. Anantha Nageswaran had said India and the US are likely to secure a trade deal by March.

 

Amid this caution, traders wrote call options at multiple strikes, hinting at further weakness in the Nifty 50. "Options data is negative indicating towards a sell-on-rise trading approach by the time it is holding below 26060 spot levels on closing basis," Vipin Kumaar, derivatives and technical analyst at Globe Capital Market, said.

 

Wednesday, the Nifty 50 closed at 25818.55 points, down 41.55 points or 0.2%. Technical and derivatives analysts have pegged the immediate support for the index at 25750 points. If the index slips below this level, it may test 25500 points in the near term. The analysts see the index facing immediate resistance at 26000-26060 points. Surpassing this level will take it to 26200 points, they said.

 

In the options chain of the Nifty 50, premiums on call options of 25850-26000 strikes expiring Tuesday declined 21-27%. Open interest in these contracts rose between 3.3 million and 5.4 million. Premiums on put contracts of 25800-25500 strikes fell 1-22% with addition of open interest at around 6 million in each of the strikes. The highest concentration of open interest was at the 26000-point call and 25000-point put contracts. 

 

Caution was seen in futures contracts of the Nifty 50, too, with traders adding short positions to the December, January, and February series. Open interest in the December futures contract rose 1.7% and that in the January series increased 5.6%. These contracts closed 0.1% and 0.2% lower, respectively, mirroring the movement in the spot index.

 

Foreign investors' short positions in index futures remain at significantly higher levels. They were net short by $3.29 billion and have reduced $11 million shorts, according to a report by Nuvama Wealth Management. In the last five days, foreign investors have added net shorts to the tune of $286 million, the brokerage said.

 

--Nifty 50 December closed at 25910.00, down 30.70 points; 91.45-point premium to the spot index
--Nifty 50 January closed at 26071.00, down 41.90 points; 252.45-point premium to the spot index
--Nifty 50 February closed at 26225.00, down 32.40 points; 406.45-point premium to the spot index

 

Vedanta, ICICI Bank, HDFC Bank, State Bank of India, Hindustan Zinc, Infosys, Shriram Finance, Sammaan Capital, BSE, Reliance Industries, Axis Bank, Dixon Technologies (India), Bajaj Finance, Kotak Mahindra Bank, Bharti Airtel, Polycab India, Canara Bank, Eternal, Vodafone Idea, and Hindalco Industries were the most actively traded underlying stocks Wednesday.  End

 

US$1 = INR 90.3800

 

Edited by Rajeev Pai

 

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