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Informist, Tuesday, Jan. 27, 2026

 

By Simran Rede

 

MUMBAI – Traders wrote out-of-the-money put options Tuesday following a moderate rise in the Nifty 50. Given the current market situation, there is a higher chance for Nifty 50 to be in a range Wednesday, according to analysts. While indices closed the session with limited gains after India announced a free trade agreement with the European Union, analysts await further details of the deal.

 

European Union countries were India's second-biggest export market in 2024-25 (Apr-Mar), accounting for 16% of India's total exports, according to data sourced from a NITI Aayog report. On the other hand, only 9% of India's overall imports were from countries in the EU. 

 

"I think the market is yet to understand what exactly the contours of the deal are, what the provisions will be and how long it will take to implement. I think it is still one year away because the approval process will take some time from both sides," Pravin Bokade, head of research at IDBI Capital Markets & Securities, said. "And then the actual implementation is probably one year away and the market is still not aware of what exactly is the impact on EU's exports to India."

 

On Tuesday, the Nifty 50 ended 0.5% higher at 25175.40 points and the BSE Sensex closed 0.4% higher at 81857.48 points. In the near term, the India-EU free trade agreement is unlikely to have any major impact on the equity market, analysts said. On Wednesday, the Nifty 50 is expected to face resistance at 25280-25320 points and find support at 24880-24800 levels, Vipin Kumaar, derivatives and technical analyst at Globe Capital Market, said. "One should keep a close eye on options positions shifting for a clue about change in stance," he said. A positional trend reversal will be seen only after the Nifty 50 crosses 25450 level.

 

Negative factors such as rupee depreciation, persistent outflow of foreign investments, and lower-than-expected corporate earnings for the December quarter continue to dampen the market sentiment, Bokade of IDBI Capital, said. Another major drag on Indian equities is high valuations compared to those of other emerging markets, where the earnings growth is also "very strong", he said. The Nifty 50 trades at a one-year forward price-to-earnings ratio of 19.8.

 

On the options chain of Nifty 50, put writing was seen at multiple strikes with maximum addition and concentration of open interest at 25000 strike. Premiums on 25000-24200 strikes expiring on Feb. 3 fell 46-55%. On the call side, the maximum addition and concentration of open interest was at 26000 strike, with its premium rising just 3.5%.

 

The put-call ratio for next week's expiry is 0.84, still showing some negative sentiments among options traders, Kumaar said. "Put call ratio has improved but it is still trading in the negative zone, and it should sustain above 1 for a sustainable upmove," he said.

 

Traders rolled over 69% of the futures contracts to the February futures, which was significantly lower than the last three-month average rollovers of 72%, Kumaar said. The February futures of Nifty 50 closed 0.9% higher at 25427.20 points, with its open interest rising over 39% to 16.36 million. 

 

--Nifty 50 February closed at 25427.20, up 224.60 points; 251.80-point premium to the spot index

--Nifty 50 March closed at 25597.30, up 209.60 points; 421.90-point premium to the spot index

 

Reliance Industries, HDFC Bank, Axis Bank, ICICI Bank, ITC, Infosys, Bharti Airtel, Vodafone Idea, Multi Commodity Exchange of India, Eternal, State Bank of India, Kotak Mahindra Bank, Bajaj Finance, Adani Enterprises, Mahindra & Mahindra, Vedanta, Hindustan Zinc, Tata Consultancy Services, and Larsen & Toubro were the most actively traded underlying stocks Tuesday.  End

 

Edited by Tanima Banerjee

 

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