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Informist, Monday, Feb. 2, 2026

 

By Simran Rede

 

MUMBAI – Positions of traders in the derivatives segment suggest that the Nifty 50 witnessed short covering Monday after the index crashed 2% in the special trading session for Union Budget 2026-27 (Apr-Mar) held on Sunday. Although the options chain shows further short covering likely in the market, technical analysts expect the market to see some selling on Tuesday with some volatility seen on the expiry of the Nifty 50's weekly derivatives contract.

 

Traders covered their short positions on multiple in-the-money call and put contracts Monday after the Nifty 50 recouped half of the losses incurred on Sunday. The market had nosedived on Sunday after Finance Minister Nirmala Sitharaman announced raising the securities transaction tax on futures contract transactions to 0.05% from 0.02% and that on options premium and exercise of options to 0.15?ch from 0.1% and 0.125%, respectively. 

 

Following this, the total cost of trading for futures is expected to double as the STT is around 84% of the total cost of trading, according to a report by HDFC Securities Monday. This is seen as negative for the BSE and NSE as the volume may be impacted, but the historical precedence shows that the STT hike does not impact volumes meaningfully, the brokerage said. Most analysts do not expect the tax to hit volumes in the futures and options market beyond a few months and see it as a short-term impact.

 

HDFC Securities sees no impact for BSE as the futures turnover on BSE is negligible. However, this is expected to be negative for the NSE as they earn more than 10% of revenue from futures trading. "The futures volume may shift to options as the STT hike impact gets negated in options trade," the brokerage said. "Positive for MCX as commodity trading becomes even more attractive," it said.

 

On the macroeconomic front, a revival in Indian equities is heavily dependent on a recovery in the rupee. It will also depend on the gold, silver prices and the outcome of a trade deal between the US and India, analysts said. The recent gold price crash should help the market gain, they said.

 

After swinging between losses and gains in the first half of the session Monday, the Nifty 50 closed at 25088.40, up 262.95 points, or 1.1% from the previous close. India VIX, also known as the fear index, fell 8.2% to end at 13.8650, reflecting easing nervousness among investors after it rose 13% in the previous two sessions.

 

Tuesday, the expiry of Nifty 50's weekly derivatives contract is seen around 25050-25100 points, Sundar Khewat, technical and derivatives analyst at Ashika Group said. He expects the 50-stock index to face resistance at 25200 points and find support at 25200 points. 

 

Foreign institutional investors had 11.7% of long positions in the Indian equity market Sunday while 88.3% of their positions were short, Khewat said. The put-call ratio of the current week's expiry is 0.95%, indicating a slight bullish sentiment of about 100–150 points upside, he said.

 

Monday, the highest addition of open interest was at 25200 call options expiring Tuesday and 24800 put contract. The maximum concentration of open interest was at 25500 call contract and 24500 put strike. 

 

While the open interest in the February futures contract of Nifty 50 fell 3.3%, that in March contract was flat and in April contract rose over 27%. The February contract closed at a premium of 61.20 points to the spot index Monday.  

 

--Nifty 50 February closed at 25149.60, up 296.10 points; 61.20-point premium to the spot index
--Nifty 50 March closed at 25306.90, up 277.30 points; 218.50-point premium to the spot index
--Nifty 50 April closed at 25435.90, up 243.30 points; 347.50-point premium to the spot index

 

Multi Commodity Exchange of India, State Bank of India, Vedanta, Reliance Industries, Hindustan Zinc, BSE, ICICI Bank, HDFC Bank, Bharat Electronics, Axis Bank, National Aluminium Co., Hindustan Aeronautics, ITC, Shriram Finance, UPL, Infosys, HIndalco Industries, Canara Bank, and Larsen and Toubro were the most actively traded underlying stocks Monday.  End

 

Edited by Deepshikha Bhardwaj

 

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