MUMBAI, Feb 24 — Nifty ends below 25,450 as heavy selling pressure intensified on the weekly futures and options (F&O) expiry day, dragging benchmark indices sharply lower and triggering heightened volatility across sectors.
The NSE Nifty 50 closed decisively below the critical 25,450 level, while the BSE Sensex dropped over 1,000 points during the session. Traders attributed the sharp movement largely to derivatives-driven activity and position unwinding ahead of expiry.
Expiry Day Volatility Amplifies Moves
Expiry sessions often witness elevated trading activity, and Tuesday was no exception.
Large positions in index futures and options were squared off, leading to accelerated price swings. Market participants adjusted positions aggressively as key support levels were breached.
Options data showed significant put writing earlier in the week near 25,500, which turned into pressure once the level failed to hold. The breakdown triggered additional selling.
Sectoral Breakdown
Selling pressure was visible across multiple sectors.
The IT sector remained under heavy stress, contributing significantly to the index decline. Banking stocks also slipped as traders reduced exposure amid volatile derivatives positioning.
Auto, metal, and realty stocks traded lower, reflecting broad-based weakness.
Market breadth remained negative throughout the session, with declining stocks outnumbering advancing counters on both exchanges.
Institutional Participation
Foreign institutional investors (FIIs) were seen adjusting positions in index derivatives.
Market observers noted that global cues combined with expiry pressures often create amplified movements in domestic markets.
Domestic institutional investors (DIIs) provided partial buying support, but it was insufficient to offset the intensity of selling.
Technical Implications
The breach of the 25,450 support zone carries technical significance.
Analysts indicated that failure to sustain above this level could open room for further downside toward the next support bands.
The Sensex also tested near-term support levels after falling sharply during intraday trade.
Traders will closely watch whether indices stabilize above lower technical thresholds in upcoming sessions.
Global Factors in Play
Global markets remained cautious amid mixed economic signals.
U.S. bond yields remained firm, and the dollar index held steady, influencing emerging market flows.
Asian markets traded mixed, but overall risk sentiment remained fragile.
These global cues added to domestic expiry-driven volatility.
Derivatives Data Signals Caution
Options chain analysis indicated rising volatility expectations.
Open interest data showed fresh short build-up in several index counters. Volatility index levels ticked higher during the session, reflecting nervousness among traders.
Weekly expiry sessions are known for exaggerated price swings, particularly when technical levels are breached.
Currency and Macro Context
The Indian rupee weakened modestly against the U.S. dollar during the session.
Stable crude oil prices provided limited support, but currency movement added to overall caution.
Macroeconomic indicators remain stable, yet short-term volatility is being influenced by global cues and sector-specific weakness.
Investor Outlook
Market participants remain cautious in the near term.
Expiry-driven volatility may subside in the next session, but traders will assess global developments closely.
Key factors to monitor include:
- Global equity direction
- U.S. bond yields
- Dollar index movement
- Sector-specific developments
For now, Nifty ends below 25,450 highlights the impact of derivatives positioning and technical breakdown on short-term market movement.