Nifty 50 – Probable Movement and Critical Levels
Research Note Dated: 04 August 2025
Despite resilient global markets, the Indian equity market witnessed significant caution on 04 August 2025. The Nifty 50 closed at 24,722.75 and the Nifty Bank at 55,619.35. While global indices like the Nasdaq Composite and S&P 500 remain elevated, FIIs aggressively shorted both index futures and options, signaling potential weakness ahead.
1. Participant-Wise Derivatives Activity
| Participant | Index Futures (Net) | Index Options (Net) | Sentiment |
|---|---|---|---|
| FII | -156,950 | -214,859 | Bearish |
| DII | +31,693 | Neutral | Supportive |
| PRO | +12,430 | -84,756 | Mixed/Neutral |
Interpretation: Heavy FII shorting in both futures and options indicates a defensive view, likely due to global event risks or domestic valuation concerns. DII support provides some cushion, but PROs seem to expect low volatility.
2. FII Cash Market Activity
- Net Equity Outflow: ₹1,464 Cr
- Index Futures: ₹-3,821 Cr
- Index Options: ₹-2,731 Cr
- Stock Derivatives: ₹-2,340 Cr (Net)
- Debt Market Inflows: ₹+2,408 Cr
Interpretation: A classic case of FII rotation from equities to debt, reflecting profit booking and cautiousness in Indian equities.
3. Global Indices Snapshot
| Index | Close | Trend |
|---|---|---|
| Nasdaq Composite | 19,662.49 | Up |
| Dow Jones | 42,967.62 | Up |
| S&P 500 | 6,045.26 | Consolidating |
Interpretation: Despite Indian market weakness, global sentiment remains stable, indicating local factors are influencing the pressure on Nifty.
4. Technical Levels and Outlook
Nifty 50 (Spot: 24,722.75)
- Support: 24,600 / 24,450
- Resistance: 24,880 / 25,100
- Outlook: Below 24,600 could trigger a move toward 24,300. Upside only above 24,880.
Nifty Bank (Spot: 55,619.35)
- Support: 55,100 / 54,700
- Resistance: 56,200 / 56,800
- Outlook: Volatile; PSU & private banks will dictate trend.
5. Option Chain & Volatility View
- CE Writers Active: 24,800–25,000
- PE Writers Active: 24,600
- India VIX: ~13.5 (Stable)
Interpretation: Indicates a range-bound outlook between 24,600–24,880 unless a breakout or breakdown occurs.
6. Cumulative F&O Positioning
| Participant | Cumulative Net (Contracts) | Bias |
|---|---|---|
| FII | -299,615 | Bearish |
| PRO | -84,756 | Range-bound View |
| DII | +31,693 | Supportive |
7. Strategy Going Forward
For Traders:
- Sell on rise near 24,880 with SL at 25,050
- Target: 24,450 / 24,300
- Avoid fresh long positions until Nifty closes above 25,050
For Investors:
- Accumulate fundamentally strong large-caps near supports
- Focus on autos, capital goods, and private banks
- Be cautious until FII flows stabilize
8. Final Word
The Nifty 50 faces near-term pressure amid heavy FII unwinding in both cash and derivative segments. The short-term bias remains negative unless sustained strength above 24,880 is observed. Global cues are stable, suggesting this is a local phenomenon likely driven by valuations and sector-specific weakness.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult your financial advisor before acting on any recommendation.
Anish Jagdish Parashar
Platform: IndirectTaxIndiaOnline research
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