Market directed for Fresh Upmove Post RBI action

Copyright © HT Digital Streams Limit all rights reserved. Ram Sahgal 4 min Read 08 Jun 2025, 09:14 IST Open interest in Nifty’s weekly 25000 strike that expired on Thursday increased by 470% to 83,472 contracts to the policy announcement. Summary The jump in an open interest in Nifty’s weekly 25000 strike that expires on Thursday shows that traders expect the market to rise and earn the positioning of the UPMOVE. The surprising monetary relief Friday set fire to an aggressive sale of Nifty Put options, suggesting that India’s benchmarked stock index is on an increase when the market opens on Monday. The Reserve Bank of India’s Monetary Policy Committee (MPC) transferred a clear signal for growth on Friday, which reduced the benchmark for the measure by 50 basis points (BPS) and the CRR) with 100 BPS. Traders responded by selling a large amount of pus options at Nifty’s 25,000 level, reflecting that the index would attract smart profits on Monday. Open interest (OI) in Nifty’s weekly 25000 strike that expired on Thursday ended an enormous 470% to 83,472 contracts after the policy announcement. Open interest is the total number of outstanding derivative contracts. Sriram Velayudhan, senior vice president, IIFL Capital Services, said it reflected the fresh trigger for markets from the unexpected action of the RBI. “The major cuts in the repo rate and the unexpected significant relief from the CRR gave a bullish texture to the market,” Velayudhan said. “Most mutual funds are underweight finances, and with this cut, we expect fresh buying in course, which will increase the market. One of the Boellishness signals is reflected in the sale of the ATM (on the money), which shows the high confidence of the traders.” The money refers to options trading at or near the current market price of an underlying index or stock. ‘Bullish Sign’ Rajesh Palviya, SVP (head of derivatives and technical research), Axis Securities agreed with Velayudhan’s actions on the index. “The writing posts on the same level as the Nifty is a very bullish sign,” said Palviya, who increased the series for the Nifty to 24900-25500 from 24500-25100 to the RBI action. Traders this week in a series of 24670-25330 for the Nifty baked with an immediate bias at the top of the series, Palviya added. Read also | Did RBI unlock its arsenal for the economy? Traders sell more options related to call options when they believe that markets will rise, enabling them to enable the premiums paid by the Put buyers – investors who buy options, or to hedge their portfolios against expected volatility. Conversely selling traders more calls than they set if they expect markets to fall. The Nifty closed 1% higher at 25003.05 on Friday after RBI reduced the rate at which it was expected to banks (repo) with greater than 50 bps to 5.5% against the market estimate of 25 BPS. It also reduced the share of the total deposit banks, should park (CRR) with 100 bps in tranches up to 3%. The policy panel also moved monetary policy attitude to neutral from accommodating. FPI’s finishing positions Meanwhile, foreign portfolio investors (FPIs) hampered their short index futures positions on 92730 contracts on Friday of 106,988 contracts a day earlier. Retail and high net value investors (HNIs) discussed some profits on their positions in the Bullish Index futures by reducing it Friday from 68669 net contracts on a net long contracts of 61524. FPIs have turned net buyers of Indian shares since mid -April as the dollar weakens and US bond yields have dropped. After selling shares worth £ 2.85 billion between October and March, and fueling a 9% drop in the Nifty to 23519, they purchased shares worth £ 21,327 in April and helped the Nifty’s recovery by 5.2% to 24751. Read also | RBI to make more easier gold loan rules for lenders for small tickets Since then, FPIs have net sellers worth £ 12,077 in the month to June 5, according to NSDL, which did not release the figure for Friday. However, BSE data shows that FPIs only bought shares on Friday worth a preliminary £ 1009.71 crore, while domestic institutional investors bought a net £ 9,342.48 crore. BSE data shows that DIs recorded the FPI that sold at lower levels, and net buying of £ 3.75 trillion shares between October last year and March this year. Their purchase of £ 1.2 trillion since March ends until June 6 has driven the recovery from a low -month to 21743.65 on April 7 to 25003.05. From March at the end to June 6, FPIs invested only £ 10,260 in the cash market, NSDL data showed. Jyoti Jaipuria, founder of the PMS firm Valentis Advisors, is positive in markets after the RBI policy, because he believes that the rate reduction and reducing CRR may cause consumption demand, which can lead to better growth in earnings. He is bullish on small -cap companies in the segments for financial, chemicals, pharmaceutical and engineering. Read also | RBI aims to increase economic growth, liquidity with Jumbo rate and CRR cuts, all business news, market news, news events and latest news updates on live mint. Download the Mint News app to get daily market updates. More topics #rbi #trendsrbi #monetary policy read next story