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The Day That Was:

Nifty Futures: 23,438.95 (0.5%), Bank Nifty Futures: 51,581.15 (0.8%).

Nifty futures concluded the trading day with increases following a two-day decline, attributed to a rebound in financial and information technology equities. The market commenced on a positive note amid diverse global indicators and continued its ascent, hitting intraday peaks and wrapping up the session just shy of the high mark with a 118-point upsurge. Investors displayed a degree of apprehension, awaiting Trump's declaration regarding potential expansive tariffs on U.S. goods, which raised alarms that these could inflate U.S. prices and impede global economic expansion, consequently restricting capital inflows to developing economies, including India. Financial and tech sectors led the upward movement, boosting market indices as stakeholders carefully observed the evolving circumstances. The forthcoming weekly expiration is also expected to contribute to the anticipated fluctuations in the markets following the tariff declaration. In forex updates, the rupee fluctuated within a narrow band, concluding the day at 85.52 versus the U.S. dollar, down 2 paise, as robust domestic market backing was moderated by ongoing uncertainties tied to trade tariffs. Bank Nifty logged a gain of 394 points. Nifty futures premium slid to 107 from 156 points, and Bank Nifty premium decreased from 360 to 233 points.

Global Movers:

US stocks rose Wednesday as traders prepared for President Trump's tariff announcements with the hope that the measures will be "contained", with the S&P 500 up 0.7% and the Nasdaq 100 gaining 0.8%. However, the reaction this morning has been the exact opposite, with index futures tumbling more than 3% as the announcements have fanned fears of a full-blown global trade war. A minimum of 10% tariffs on all exports to the US and additional duties on 60 countries will be applied starting midnight Saturday. Meanwhile, China was slapped with tariffs of 34% while India was set at 26%. In other markets, the VIX fell last night but overnight futures were up around 15% this morning, the dollar fell a little while the 10-year yield dropped, Bitcoin ended nearly 3% lower, Gold rose to a new record of $3167/ounce on the risk-off mood while oil was down 2.7% this morning after rallying yesterday.

Stock Futures:

Yesterday, Kalyan Jewellers India, Tata Consumer Products, PNB Housing Finance, and M&M Finance saw heightened trading activity and price fluctuations, indicating strong momentum and growing investor interest.

Kalyan Jewellers India experienced a significant 11.6% uptick, marking its largest single-day gain since the previous month, as it closed above last month's peak due to gold prices hitting new highs, nearing Rs 91,000 per 10 grams. This price surge was supported by a notable increase in open interest, reflecting a solid long build-up with the addition of 36.4 lakh shares, representing the highest single-day percentage change in open interest across the last two series. However, the stock has appreciated by 27% since its March lows and observed a 6% unwinding of 9.5 lakh shares, indicating wavering conviction and suggesting limited short-term upside potential, Furthermore, the two-month peak in historical volatility implies an expanded trading range, necessitating cautious assessment of future price action.

Tata Consumer Products' stock saw a 6.8% increase, achieving a near two-month high, driven by the highest single-day volume in five months and its most substantial daily percentage price gain since April 2020. This rally followed an upgrade by Goldman Sachs, which raised its price target by over 15% and shifted its rating from "neutral" to "buy," fueled by expectations of robust EPS growth from improved tea margins and distribution expansion. However, despite the price rise, there was a 1.9% decline in open interest after it peaked at the year's highest level, illustrating a short-covering scenario amid declining trader confidence. This open interest condition signals a potential scenario of short covering or a fragile long build-up, hinting at limited upward momentum in the upcoming sessions. The lack of healthy open interest growth, juxtaposed with the price rally, reflects a cautious market outlook.

PNB Housing Finance recorded a robust 5% increase, reaching its highest level in the past two months. This rise is attributed to a strong performance within its Retail segment, boasting approximately 18% year-over-year growth as of March 31, 2025. This growth propelled the total loan book past ?75,000 crore, emphasising the firm's solid footing in the housing finance sector. Yesterday's price increase was coupled with a remarkable 59.2% surge in open interest, reflecting a significant addition of 5 lakh shares, which positioned total open interest at its peak and marked the company’s entry into the F&O segment for the current series. This dynamic, where a substantial price increase is correlated with significant expansion in open interest, indicates a robust build-up of long positions, suggesting anticipation of further upward price movements in forthcoming sessions.

M&M Finance extended its downtrend for the third consecutive session, falling 3.3% and closing near the month’s prior low. This downturn coincided with a substantial 13.3% rise in open interest, accompanied by a notable addition of 26.2 lakh shares, marking the highest single-day change in open interest over the last two series. In light of the recent earnings announcement for the January-March 2025 period, the Board of Directors has scheduled a meeting for April 22, 2025, to approve the consolidated financial results for the fiscal year ended March 31, 2025 after which the stock has declined by 8% over the past three sessions, witnessing a significant 33% rise in open interest at 55.4 lakh shares. This combination of a pronounced price decline and increased open interest strongly suggests a considerable short build-up.

Put-Call Ratio Snapshot:

The Nifty put-call ratio (PCR)rose to 0.96 from 0.76 points, while the Bank Nifty PCR rose from 0.87 to 0.94 points.

Implied Volatility:

CESC and Dr Reddy's Laboratories have witnessed significant shifts in their stock prices, as indicated by their remarkable implied volatility ratings of 100 and 94, respectively. At present, their implied volatilities are at 50% and 34%. This increase in implied volatility suggests that options for these stocks are becoming pricier, prompting traders to consider hedging strategies to reduce risks tied to price fluctuations. Conversely, Tata Technologies and IREDA show the lowest implied volatility ratings, reporting implied volatilities of 34% and 52%, respectively. This decrease in volatility suggests that their options are comparatively more appealing, offering a favourable opportunity for traders looking to buy long positions.

Options volume and Open Interest highlights:

Macrotech Developers and CDSL are generating significant interest among traders, as evidenced by a 4:1 call-to-put volume ratio, indicating a positive trend. Nevertheless, these high ratios may also reflect a differing outlook. Conversely, Godrej Consumer Products and Escorts Kubota are also under scrutiny due to an uptick in put option volumes, indicating growing worries about possible downturns; however, these elevated ratios could suggest a different interpretation. Regarding positioning, Siemens Ltd has registered the highest open interest in call options, followed by Voltas, which is just 15% lower than its annual high. Meanwhile, BSE Ltd and Manappuram Finance are at the forefront on the put side, indicating a greater probability of price fluctuations. (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:

Trading activity in index futures exhibited a clear divergence, indicating differing directional inclinations among major market players. Clients reported a notable net decrease of 6,004 contracts from a total of 6,232 contract adjustments, indicating a clear bearish sentiment. In contrast, Foreign Institutional Investors (FIIs) showcased a strong accumulation by adding 4,249 contracts, reflecting a distinctly bullish perspective. Proprietary traders, while contributing to the overall decline, exhibited a minor reduction of 228 contracts, implying a relatively neutral stance. In the stock futures arena, a substantial influx of 67,517 contracts was recorded. Clients experienced a significant drop of 28,060 contracts, reinforcing their prevailing bearish stance. On the other hand, FIIs matched the total contract increase by adding 67,517 contracts, demonstrating an assertive bullish positioning. Proprietary traders again reduced their positions, trimming 19,684 contracts, which reflects a cautious and bearish outlook, although this reduction is less severe than that of the clients.

Securities in Ban for Trade Date 03-April-2025: NIL

Nifty

Bank Nifty

Stocks with High IVR:

Stocks with Low IVR:

Stocks With High IVP:

Stocks With Low IVP:

Stocks With High Call Volume To Put Volume

Stocks With High Put Volume To Call Volume

Call Open Interest Relative to Record High

Put Open Interest Relative to Record High

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