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The Day That Was:

Nifty Futures: 22,530.35 (-0.2%), Bank Nifty Futures: 48,213.9(0.4%).

Nifty futures ended slightly lower yesterday, dropping 34 points amid increased volatility and mixed sector performance. Initial upward momentum, which lifted the futures to a daily high, was curtailed by a significant sell-off in the technology sector, fueled by concerns over a slowdown in the US economy and rising global trade tensions. This pessimistic perspective, compounded by continuous divestment from Foreign Institutional Investors, offset the gains in the banking and automotive sector. Concerns about US President Trump's trade policies, particularly the 25% tariffs on steel and aluminium, echoed through the market's volatile behaviour, highlighting fears of a potential US recession impacting discretionary IT spending. However, the Bank Nifty future displayed strength, closing up 214 points. The Nifty futures premium fell to 60 from 66 points, while the Bank Nifty premium rose from 146 to 157 points.

Global Movers:

US stocks erased a sizeable portion of their post-CPI advance, as concern mounted about the ongoing trade wars. The S&P finished 0.5% up, while the Nasdaq 100 and the Dow ended 1.1% higher and 0.2% down, respectively. Feb CPI came in below expectations, which meant that the Fed has room to move policy lower, but fears are mounting that tariff wars will make it difficult for inflation pressures to remain down. In markets, the VIX fell for a second straight day, the dollar and the 10-year yield rose slightly, bitcoin jumped over 4%, Gold rallied for a second day and oil advanced 2% on easing US inflation and data that showed robust demand.

Stock Futures:

Yesterday's session saw elevated trading volumes and significant market activity, particularly in IndusInd Bank, Adani Green, LTTS, and Ramco Cement, indicating heightened momentum and increased investor interest in these stocks.

IndusInd Bank experienced a significant 4.3% price surge following a new 52-week low, accompanied by the highest single-day trading volume on record. This rebound came after a sharp 27% decline in the previous session, triggered by the bank’s internal review, which revealed an adverse impact of 2.35% (?1,577 crore) on its net worth as of December 2024. The rally was largely driven by a sharp unwinding of 13% in open interest, with 92.93 lakh shares being shed—marking the largest single-day reduction in recent times and indicating a short covering. This sharp reversal underscores a strong market reaction to the unwinding of bearish positions, suggesting potential for further momentum if stock sentiment stabilizes.

Adani Green saw a notable 3.6% rally, marking its second consecutive day of gains and closing above the prior session’s high. This surge was driven by commissioning a 250 MW solar power project in Andhra Pradesh, increasing its total operational renewable energy capacity to 12,591 MW. The rally was further supported by an 8.9% rise in open interest, signalling the initiation of new long positions and pushing the total futures open interest to a series high. Additionally, a significant 11% rebound from the current month’s lows, alongside a 17.2 lakh increase in open interest, reflects strong short-term positive sentiment towards the stock.

LTTS dropped 5.5%, hitting its lowest level in ten months, reversing gains from the previous week. The decline was primarily triggered by Morgan Stanley’s downgrade of India’s IT sector, compounded by recession concerns in the US and heavy selling in American markets, which is weighing on Indian IT stocks. However, the bearish move lacked significant trader conviction, with only a modest 1% increase in open interest (6,600 shares). Since the series began, the stock has fallen by 3.2%, while open interest has decreased by 17% (1.19 lakh shares), indicating long unwinding and reinforcing a persistently cautious-to-bearish outlook on the stock.

Ramco Cement's stock price plummeted by 4.1%, marking its fourth consecutive session of decline and reaching its lowest point since September 2024. This downturn occurred despite the company's resolution of its CENVAT Credit litigation, settling for Rs. 4.92 crore, which was intended to bolster financial clarity. However, the market largely disregarded this news, likely due to the relatively small settlement amount. Critically, this price drop coincided with a substantial 32.2% increase in open interest, equivalent to 13.5 lakh shares, representing the highest single-day open interest surge in the past three series. This synchronized price depreciation and significant open interest accumulation indicates a substantial short build-up, reflecting a pronounced bearish sentiment and anticipating further downward price pressure.

Put-Call Ratio Snapshot:

The Nifty put-call ratio (PCR) fell to 0.96 from 1.09 points, while that of the Bank Nifty rose from 0.94 to 0.98 points.

Implied Volatility:

BSE Ltd and CESC are experiencing significant price swings, evidenced by their peak implied volatility rankings. BSE Ltd's implied volatility stands at 65%, while CESC's is at 48%. This rise in implied volatility signifies that options for these stocks are expensive, which may prompt traders to implement hedging strategies to reduce risks associated with price changes. In contrast, IREDA and Torrent Pharmaceuticals are displaying the lowest implied volatility scores of 56% and 14%, respectively. This indicates their options are more reasonably priced, offering a beneficial opportunity for traders looking to take long positions.

Options volume and Open Interest highlights:

BSE Ltd and Aarti Industries are drawing notable interest from traders, highlighted by their call-to-put volume ratio of 4:1 each, suggesting a bullish outlook. Nevertheless, these ratios might also indicate differing views among investors. Conversely, Patanjali Foods and Supreme Industries are witnessing a rise in put option volumes relative to calls, with each exhibiting a 2:1 ratio, signalling increased caution about potential downturns. Regarding positioning, IIFL Finance, a newcomer in the F&O segment of this series, has seen the highest open interest in both call and put options. IREDA Ltd follows on the call side, while Patanjali Foods leads on the put side, pointing to a greater likelihood of price 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 yesterday's session, a notable expansion of long client positions in index futures, quantified by a substantial increase of 6,057 contracts, suggests a prevailing bullish bias within this segment. Conversely, Foreign Institutional Investors (FIIs) and proprietary traders significantly reduced their positions, shedding 4,510 and 1,691 contracts, respectively, indicating a noticeable bearish inclination. Shifting focus to stock futures, a marked reduction of 8,172 contracts by clients reveals a noticeable shift towards a bearish stance. However, this was counterbalanced by a considerable augmentation of 10,624 contracts by FIIs, signalling a robust bullish outlook. Contrastingly, proprietary traders executed a drastic curtailment of 30,087 contracts, demonstrating an exceptionally bearish perspective.

Securities in Ban for Trade Date 13-March-2025:

1) BSE
2) HINDCOPPER
3) INDUSINDBK
4) MANAPPURAM
5) SAIL

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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