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The Day That Was:

Nifty Futures: 25,615.0 (1.0%), Bank Nifty Futures: 57,256.4 (0.8%).

Nifty Futures (July series) surged by 265 points, and Bank Nifty futures (July series) advanced by 469 points, as Indian equities extended their rally for a third consecutive session on Thursday. This upturn was primarily driven by robust performances in heavyweight stocks and a broad-based rally across financial and metal sectors. The alleviation of Israel-Iran tensions significantly bolstered global risk appetite, reigniting investor confidence in riskier assets, with the positive sentiment fully reflected in the Indian markets. The surge in the Nifty Bank index, reaching a fresh all-time high, was spearheaded by intense buying in private bank stocks. As a monthly F&O expiry, short covering provided additional impetus, compelling traders to offset their short positions, thereby amplifying the upward momentum. Simultaneously, the rollover of fresh long positions into the next series underscored continued market optimism. Sectoral performance was varied: metal, oil & gas, and financial services shares registered gains, while media, realty, and IT shares experienced declines. The metal index notably added 2.3%, benefiting from a weaker U.S. dollar, which renders dollar-denominated assets more attractive. Concurrently, the India VIX, a key gauge of market volatility, contracted by 2.9% to 12.59, signalling reduced investor apprehension and an anticipation of diminished market swings, typically a favourable indicator for equities. The domestic currency appreciated by 38 paise to 85.71 against the dollar, following its prior close at 86.09, underpinned by a declining dollar index. Nifty futures premium contracted from 105 points to 66 points, and the Bank Nifty premium decreased more substantially, from 166 points to 50 points.

Global Movers:

US stocks gained, ending the day on an optimistic note as investors prepared for rate cuts to begin after four straight meetings that saw none. The S&P 500 jumped 0.8% and ended just a whisker below its February record of 6144, while the Nasdaq 100 bounced 0.9%, building on its own record. Meanwhile, data showed that continuing applications for unemployment benefits rose to the highest since November 2021, signalling that more people are staying out of work for longer. Separately, quarterly GDP was revised lower than expected as consumers cut back on spending. Coming to related markets, the VIX fell 1% for its fifth straight loss, the dollar index and the 10-year treasury yield continued their drop, gold prices fell a little and were on track for their second straight weekly loss, while brent crude prices were mostly flat and on track to suffer their worst weekly plunge in two years.

Stock Futures:

Yesterday's trading session saw a significant surge in investor optimism, evidenced by robust activity and notable price swings in TIIndia, Hind Copper, UPL, and Mazagon Dock. High trading volumes across these companies further underscore this trend, suggesting potential emerging momentum shifts within their respective sectors.

TIIndia recently demonstrated a significant rebound, pulling back from its monthly lows and signalling a potential trend reversal after enduring three consecutive days of decline. Although no specific major news catalysed yesterday's surge, the prevailing positive market sentiment, coupled with monthly futures and options expiry, likely propelled this favourable price action. The stock experienced notable short covering, evidenced by a 5.2% price gain alongside a 23.6% decrease in open interest. Current futures open interest stands at 12,300 contracts, reflecting a shedding of 3,795 contracts. In the June series, TI India witnessed a substantial unwinding of 2,36,150 in futures open interest, while the rollover settled at 75.8%, a considerable decline compared to the previous 93.3%. The significant decrease in open interest and lower rollover percentage in the June series, particularly in the context of short covering, indicates a reduction in bearish bets and a potential shift in market sentiment towards TI India, warranting close observation for further directional cues.

Hind Copper hit a six-month high, extending its gains for the fifth straight session on positive market sentiment. This comes as global copper prices rose, with Goldman Sachs forecasting a 2025 peak of $10,050 per ton in August, driven by supply concerns after increased US shipments due to Trump's tariff proposals. In the derivatives market, Hind Copper saw Long Addition, with its price up 4.8% and open interest increasing 3.9% to 12,514 contracts, adding 464 new contracts. While the June series saw a significant unwinding of 21,20,000(800 contracts) in futures open interest, the rollover remained stable at 95.4%, up from 94.7%. This suggests fresh bullish positions in the current series, though a substantial number of older positions were closed in June, indicating a mixed but still largely positive outlook from derivative perspective.

UPL witnessed a reversal in its recent upward price trajectory, erasing previous two-day gains, which appears to stem from profit-booking after a significant run-up. This downturn in price of 2.3% was accompanied by a short addition, indicated by a 1% increase in open interest. The current futures open interest stands at 25,926 contracts, reflecting a new accumulation of 262 contracts. Notably, the June series observed a substantial expansion in futures open interest, with a new infusion of 25,09,460 share, while the rollover registered an impressive 98.8% compared to the prior 94.9%. This confluence of price decline and rising open interest, particularly the strong rollover, suggests that derivatives participants, especially short sellers are establishing positions, anticipating further price consolidation or a downside move.

Mazagon Dock experienced its third consecutive session of decline, reflecting sustained profit-booking and unwinding of long positions. The stock registered a 2.2% price depreciation coupled with an 8.1% contraction in open interest, indicative of a long unwinding scenario. Current futures open interest stands at 18,967 contracts, marked by a reduction of 1,670 contracts, which translates to a substantial 2.9 Lc shares in open interest—the highest single-day liquidation. Being a new entrant in the June series, Mazagon Dock initially witnessed a significant expansion in futures open interest for the series, with an accumulation of 15,096 contracts, bringing the total futures open interest to 33.2 Lc shares, while the rollover for the series stood at a notable 90.2%. This prominent unwinding of long positions, particularly on an expiry day with the highest single-day decrease in open interest, suggests that existing long holders, including both option buyers and futures traders, have exited their positions, likely to secure profits or mitigate further losses.

Put-Call Ratio Snapshot:

The July series Nifty put-call ratio (PCR) rose to 1.28 from 1.14 points, while the Bank Nifty PCR fell from 1.16 to 1.14 points.

Implied Volatility:

BSOFT and Astral Ltd experience significant stock price swings, reflected by high implied volatility (IV) scores of 72 and 68. Currently, BSOFT's IV is at 41%, and Astral Ltd's is at 27%. This rise in IV has increased option premiums, leading traders to adjust their risk management strategies to better handle market dynamics. In contrast, IRCTC and Hind Zinc are more stable, with the lowest IV scores in their sector—IRCTC at 22% and Hind Zinc at 29%. Their consistent volatility makes them appealing to investors looking for long positions during periods of increased uncertainty and market volatility.

Options volume and Open Interest highlights:

TI India and PNB HOUSING FINANCE are showing strong bullish signals, each with call-to-put ratios of 5:1, indicating trader optimism about short-term price increases. However, such high ratios could also suggest overvaluation in the options market, so caution is advised for those considering new long positions. In contrast, Dabur India and Colgate-Palmolive (India) appear more cautious, with higher put-to-call ratios and increased put trading, reflecting investor worries about potential declines. While this may indicate bearish sentiment, the rising put volume could also mean oversold conditions, offering contrarian opportunities for traders expecting a reversal. Regarding positions, PNB Housing Finance has significant open interest in call options, followed by Jubilant Food Works, pointing to anticipated price movements that may establish key resistance or support levels. These patterns suggest potential sharp market swings, favouring strategies that focus on volatility. (This data considers only those stock options that saw a minimum of 500 contracts traded on the day for both calls and puts).

Participant-wise Open Interest Net Activity:

In the June F&O expiry session, significant positioning shifts revealed contrasting market biases. In index futures, Clients reduced 36,880 contracts, indicating a bearish sentiment, while FIIs added a substantial 71,903 contracts, signaling a strong bullish conviction. Proprietary traders also decreased 32,815 contracts, largely aligning with client caution. In stock futures, Clients again showed a bearish inclination by decreasing 113,092 contracts. Conversely, FIIs increased their stock futures by 47,705 contracts, highlighting their continued selective optimism, while Proprietary traders added a marginal 1,709 contracts. Overall, FIIs demonstrated a consistent bullish stance across both segments, sharply diverging from the broadly cautious or bearish posture of retail clients and, to a lesser extent, proprietary desks.

Securities in Ban for Trade Date 27-June-2025: NIL

Nifty

Bank Nifty

Stocks with High IVR:

Stocks with Low IVR:

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Stocks With Low IVP:

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