Domestic markets are likely to see a positive opening, but are likely to remain lacklustre on Tuesday. Gift Nifty at 25080 signals a positive opening of about 100 points amid moderate gains in Asian markets. However, analysts expect the market to remain in consolidation phase and sector and stock rotation by institutional investors will cap market gains. They expect volume are likely to remain low amid lack of global cues. With the results season (for Q4 of FY25) coming to an end, there are few cues from the domestic side as well, they said.
Ajit Mishra – SVP, Research, Religare Broking Ltd, said: We believe this intermediate pause in the index, without any significant damage to the overall structure, is a healthy sign.” During such phases, traders should adopt a stock-specific approach. Among the key sectors, banking now merits more attention following its recent consolidation phase, as it could lead to the next leg of the rally and help the Nifty move towards the 25,200 mark and beyond, he further said.
Other sectors are expected to contribute on a rotational basis. Apart from corporate earnings, global cues and the trend in foreign fund flows will remain key factors to watch.”
Meanwhile, the volatility index has remained firm above 15 for the last few days. The India VIX surged by 4.86 per cent to 17.3550, indicating a rise in market volatility and a potential increase in investor nervousness. This uptick reflects growing uncertainty in the near term. Open Interest (OI) data shows the highest concentration on the call side at the 25,000 and 25,200 strike prices, suggesting strong resistance levels at these points. On the put side, significant OI build-up is seen at the 24,900 and 24,800 strike prices, marking these levels as key support zones, said Hardik Matalia, Derivative Analyst, Choice Broking.
F&O data continues to present a cautious outlook said analysts.
In the derivatives arena, signs are gradually tilting in favour of the bears, said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.
“While call writers are actively building positions at higher strikes, put writers are still holding their ground at lower ends — a textbook set-up for consolidation. Activity of call writers at distant levels suggests that upside might stay capped unless strong buying kicks in. The 25,000 Call now carries the highest open interest with 1.17 crore contracts, establishing a short-term resistance ceiling,” he said. Additionally, the Put-Call Ratio (PCR) has dipped sharply from 0.75 to 0.60, indicating a sentiment shift that now leans more toward bearish tones, he added.
Published on May 20, 2025
