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Informist, Tuesday, Dec. 23, 2025

 

By Simran Rede

 

MUMBAI – A tug-of-war between bulls and bears saw the benchmark Nifty 50 index close flat Tuesday after a volatile session on the expiry of its weekly derivatives contract. Traders aggressively wrote call options, leading to range-bound movement of the index, analysts said. However, traders also covered their short positions during the session, which pushed the Nifty 50 to an intra-day high of 26233.55 points. While some analysts continue to maintain their positive outlook on the market, others expect the Nifty 50 to consolidate this week.

 

The 50-stock index went past 26200 points for the first time after 11 sessions. However, it failed to sustain the rise and closed flat at 26177.15 points, up just 4.75 points. The Nifty 50 moved in a tight range of over 100 points during the day's session. Traders aggressively sold call options at 26200–26250 strikes and put options at 26200 and 26150 strikes, which limited the index to a range.

 

Despite this, analysts believe the Nifty 50 will test its all-time high even in a holiday-truncated week. The outlook for the market remains positive with the headline index expected to face resistance at 26310–26500 points in the near term. If the index rises above these levels, the next resistance is seen at 26700 points.

 

The short-covering during the session has given rise to hopes of the index hitting a new high. However, selling at higher levels also induced some caution. If the Nifty 50 falls from the current level, it is expected to find support at 26120–26050 points, according to analysts. 

 

In the derivatives chain of the Nifty 50, premiums on out-of-the-money call contracts between 26200 and 27000 strikes declined 13-44%. The maximum addition of open interest was at the 26200 call option and the highest concentration was at the 27000 call contract. Premiums on put contracts between 26150 and 25700 strike prices declined 16-36%. The maximum addition of open interest was at the 26200 put option and the highest concentration was at the 26000 put contract.

 

Just when the market was expecting foreign institutional investments to come back, they sold INR 4.57 billion worth of Indian equities Monday after having been net buyers the previous three sessions. "While an improving domestic demand outlook provides underlying support, uncertainty around global trade negotiations and the trajectory of the rupee will continue to influence sentiment," Vinod Nair, head of research at Geojit Investments, said in a note.

 

Analysts also believe the index will consolidate this week at higher levels, given that there are only four trading sessions, of which two are already over. "Overall, we expect trading volumes to remain subdued during the holiday-shortened week," Siddhartha Khemka, head of research of wealth management at Motilal Oswal Financial Services, said in a note.

 

Going ahead, the market will track key global economic data, including the US advance report on durable goods and the GDP print for the September quarter, due 1900 IST, followed by initial jobless claims, due Wednesday.

 

--Nifty 50 December closed at 26202.10, up 4.20 points; 24.95-point premium to the spot index
--Nifty 50 January closed at 26387.00, up 9.60 points; 209.85-point premium to the spot index
--Nifty 50 February closed at 26531.00, up 15.70 points; 353.85-point premium to the spot index

 

Axis Bank, HDFC Bank, Reliance Industries, Cholamandalam Investment and Finance Co., ICICI Bank, Infosys, ITC, Bajaj Finance, Shriram Finance, Bharti Airtel, Dixon Technologies (India), Mahindra & Mahindra, Eternal, Hindalco Industries, Multi Commodity Exchange of India, Coforge, Larsen & Toubro, and State Bank of India were the most actively traded underlying stocks Tuesday.  End

 

Edited by Rajeev Pai

 

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