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Informist, Tuesday, Jan. 20, 2026

 

By Simran Rede

 

MUMBAI – The Nifty 50 is expected to continue its downward journey after falling sharply Tuesday, as traders have written call options at multiple strikes. Moreover, premiums on out-of-the-money put options have risen multifold, indicating a bearish market sentiment. However, some technical analysts believe the current levels are oversold and the Nifty 50 index may bounce back in the coming sessions ahead of the Union Budget.

 

Traders also added short positions to the January futures contract of Nifty 50. The contract closed at 25268 points, down 328 points or 1.3%. Open interest in the contract rose around 4% to 17 million. The futures contract closed at a premium of 35.50 points to the spot index. Tuesday, the Nifty 50 closed 1.4% lower at 25232.50 points and the BSE Sensex closed 1.3% down at 82180.47 points. The 50-stock index closed at an over eight-month low.

 

In the spot market, the fall was broad based, with all the sectors closing in the red. The broader market indices fell more than their benchmark peers. The fear gauge India VIX closed 7.6% higher at 12.7300, indicating increased near-term nervousness in the market.

 

The put-call ratio of 0.58 indicates slightly oversold positions, said Vipin Kumaar, assistant vice-president – technical and derivatives at Globe Capital Market. "The possibility of some bounce back cannot be ruled out at this juncture," he added. The Nifty 50 is expected to face an immediate hurdle at 25620 points, he said. However, given the bearish sentiment in the market, the index's immediate support is pegged at 25150-25100, Kumaar said.

 

Open interest addition in call contracts of 25500-25400 strike prices expiring next week were the highest, up over 4-8 million. Premiums on 25400-25600 strike call contracts, which are around 1% higher from the spot level, fell 63-70%. The maximum addition of open interest was at 25500 call and the highest concentration was at 26000 call contract.

 

On the put side, premiums on contracts lower than the spot level rose, indicating a fall in the index in the near term. Premiums on 25200–24500 strikes expiring next week more than tripled. The maximum addition and the highest concentration of open interest was at 25000 put contract.

 

--Nifty 50 January closed at 25268.00, down 328.00 points; 35.50-point premium to the spot index

--Nifty 50 February closed at 25404.00, down 333.80 points; 171.50-point premium to the spot index

--Nifty 50 March closed at 25589.00, down 335.70 points; 356.50-point premium to the spot index

 

ICICI Bank, HDFC Bank, Hindustan Zinc, Reliance Industries, Bajaj Finance, State Bank of India, Kotak Mahindra Bank, Eternal, Hindalco Industries, UPL, Vedanta, Punjab National Bank, Grasim Industries, Bharti Airtel, Canara Bank, LTIMindtree, Multi Commodity Exchange of India, Infosys, and Vodafone Idea were the most actively traded underlying stocks Tuesday.  End

 

Edited by Ashish Shirke

 

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