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Informist, Tuesday, Sept. 29, 2026

 

By Eshitva Prakash

 

MUMBAI – Traders sold options on both sides of the derivatives chain of the Nifty 50 index in tumultuous trading Tuesday. Monthly expiry of Nifty 50 contracts, along with the semi-annual rejig of Nifty indices added to volatility in the market. While the index is oversold, which will likely lead to value buying, analysts don't expect a sharp recovery in the headline index due to rising bond yields and elevated crude oil prices.

 

Premiums of put contracts across 22400-22600 strike prices declined up to 17%. Further out-of-the-money put contracts came under a larger selling pressure. The highest put base at 22000 strike price indicates long-term support for the Nifty 50. Analysts expect the headline index will rebound from 22600 points. Open interest at the 22600 strike rose by nearly 3 million contracts to 4.6 million contracts. The Nifty 50 index slipped below its 200-week moving average, the first such breach since Covid-19-induced selling, Rupak De, senior technical analyst at LKP Securities said. A fall below the 200-week moving average, which is currently placed at 22600 points, will trigger a sharp correction in the index, De said.

 

On the other side of the options chain, traders also sold call options, which limits the upside for the index. Premiums on deep-out-of-the-money call contracts across 23000–23500 strike prices declined 30–60%. Open interest at near-the-money call options surged, indicating that the Nifty 50 will face multiple resistances, cutting down prospects of a potential recovery. 

 

Open interest of the September futures contract fell over 25% and that of October futures rose 26%, suggesting a roll over of positions into next-month contract. Some traders also decided to take profits, as surging oil prices and expectations of a high interest rate regime deterred directional bets.        

 

Tuesday, the Nifty 50 ended at 22716.20 points, down 0.3% compared to Monday. Shares of Adani Enterprises and Adani Ports and Special Economic Zone ended 4.5-5% higher, primarily due to repricing during the closing auction session. Select pharmaceutical stocks also rose, owing to defensive purchasing amid high crude oil prices. Meanwhile, information technology stocks continued to be a drag for the 50-stock index, weighed down by concerns about new artificial intelligence tools compressing revenue and profitability of software-as-a-service companies.

 

Tuesday, the November contract of Brent Crude oil ended 1.5% lower at $103.70 per barrel on the Intercontinental Exchange. The contract has risen nearly 15% so far this month. This has triggered a sharp fall in the Nifty 50, as the index is headed towards the worst performance in the month of September since 2018.

 

Domestic equities continue to face correction amid volatile crude oil prices, US Treasury yields hovering near two-decade highs, and persistent selling by foreign institutional investors, Vinod Nair, head of research at Geojit Investments said in a note. The unprecedented pace of fundraising from initial public offerings is also draining liquidity out of the market, adding to the pressure, the analyst said. 

 

--Nifty 50 October closed at 22893.20, down 17.50 points; 177-point premium to the spot index

--Nifty 50 November closed at 23007, down 18.20 points; 290.80-point premium to the spot index

 

HDFC Bank, Reliance Industries, BSE, ICICI Bank, State Bank of India, Vodafone Idea, Infosys, Manappuram Finance, Bharti Airtel, Jio Financial Services, and Axis Bank were the most actively traded underlying stocks Tuesday.  End

 

US$1 = INR 95.98

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

 

Edited by Deepshikha Bhardwaj

 

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