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Informist, Thursday, Oct. 1, 2026

 

By Eshitva Prakash

 

MUMBAI – Traders purchased deep-out-of-the-money put options of the Nifty 50 index as domestic equities came under pressure from high US bond yields, elevated crude oil prices, and selling by foreign institutional investors. Options positioning reflects expectations of a deeper fall in the headline index, but a decline in premiums towards the end of the session suggests some hopes of a recovery from oversold positions.

 

Premiums of put contracts across 22000-22300 strike prices rose 25–97%. On the call side, traders relentlessly sold out-of-the-money contracts across 22700-23000 strike prices, as their values declined by over 60%. Taken together, these two transactions show clear demand for negative-delta contracts in the market. Traders also purchased deep-out-of-the-money put contracts, with premiums across the 21000–21800 strikes rising sharply. 

 

A fall in open interest at several key put strikes showed significant long unwinding and a risk-averse attitude among traders. Put contracts set to expire later than Tuesday were also bought, indicating that weakness in the Nifty 50 is expected to last throughout October. Additionally, the delta between the October futures contract of the headline index and the spot index declined further after the contract ended the day 187.30 points lower. The India VIX — the market's fear gauge — ended over 7% higher at 14.46 points. 

 

"Put (buyers) are rotating their strikes lower to deep out-of-the-money strikes ahead of the long weekend," Ajit Mishra, senior vice president of technical research at Religare Broking, said. "Some traders want to hedge their positions before the weekend as the market picture is quite unclear," Mishra said. Crude oil prices whipsawed Thursday, hurting investors' risk appetite. At 1639 IST, the November futures contract of Brent crude oil traded 1.7% higher at $99.71 per barrel on the Intercontinental Exchange. Earlier in the session, the contract fell as low as $96.55 per barrel.

 

A sell-off in the global bond market drove yields higher, weighing on equities. The 10-year US Treasury yield, a yardstick for global borrowing costs and asset prices, rose to 5.34%, its highest since 2002. A surge in energy costs has driven inflation worldwide, and the boom in artificial intelligence and data centre spending has raised expectations for where short-term interest rates will settle.

 

"The 22000 points will be the first support for the Nifty 50 (and) if it fails to hold 22400 points, it will probably test this level in the near-term," Mishra said. A fall to 21800 points is likely if the index falls below 22000, the analyst said, adding that any attempt at recovery will face high resistance at 23000 points. 

 

Thursday, the Nifty 50 ended at 22421.95 points, down 0.9% from Wednesday. Shares of most information technology companies ended higher as rising crude oil prices put pressure on the rupee. A weaker rupee is positive for earnings of these companies as most of their revenues come from international clients. A rise in select banks also helped prevent a steeper decline. Meanwhile, a weaker-than-expected volume growth in September led to a sharp decline in automobile stocks, which were among the top laggards of the 50-stock index. 

 

The Nifty 50 ended at its lowest closing level in six months and ended the week over 3% lower. This decline marked the eighth consecutive weekly decline. "The market sell-off has been driven largely by external factors, with bond yields reaching multi-year highs and crude oil prices remaining elevated, raising concerns about the economic outlook for 2026," Vinod Nair, head of research at Geojit Investments, said. Nair said investors were also cautious ahead of September quarter results and the Reserve Bank of India's upcoming interest rate decision. September quarter earnings are expected to be softer than the trailing quarter, in which companies benefited from the lagged impact of operating costs. "While the RBI, which was more open-minded last policy, would consider a shift in its stance in response to global inflationary pressures and the need to support the rupee," Nair said. 

 

--Nifty 50 October closed at 22520.00, down 187.30 points; 98.05-point premium to the spot index

--Nifty 50 November closed at 22634.30, down 194.00 points; 212.35-point premium to the spot index

--Nifty 50 December closed at 22765.00, down 208.40 points; 343.05-point premium to the spot index

 

Kotak Mahindra Bank, Bajaj Auto, Reliance Industries, BSE, ICICI Bank, Mahindra & Mahindra, Axis Bank, Hero MotoCorp, TVS Motor Co., and Maruti Suzuki India were the most actively traded underlying stocks Thursday.  End

 

US$1 = INR 96.32

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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