Nifty Tests 25,000 Mark as Bulls and Bears Fight for Control

Bulls and bears fought hard around the 25,000 mark on Monday as the Nifty tested a crucial level it has not convincingly reached since the US-Iran war began in late February. By noon on Monday, the index traded slightly down at 24,965.

Market Movements

The tug-of-war followed a 13 percent recovery in the Nifty from its 52-week low of 22,179.9 on October 8 to 25,030.35 on Friday. Nearly 70 percent of these gains happened in the first week of November. Markets were open for Muhurat trading on Sunday, but cash volumes stayed low at ₹23,275 crore compared to a daily average of over ₹1.2 trillion this month, so that special session is excluded from the analysis. Markets will stay closed on Tuesday for Diwali-Balipratipada.

Options Data

On Monday, traders added 297,941 Nifty incremental contracts at the 25,000 strike call expiring today, bringing the total open position to 447,151 contracts. In comparison, they added 56,492 incremental shares at the 25,000 strike put, which had open positions of 162,707 contracts based on National Stock Exchange data. Higher sales of calls than puts show that bears are confident the market will not cross that level and that they can keep the premium paid by buyers. Option sellers are generally seen as better-capitalized market participants than option buyers.

Global Triggers

Almost 9 percent of the gain from the October 8 low came in November through Friday. This followed a Democratic sweep of the US Congress in the midterm polls, which pushed oil prices down 16 percent to $98.32 a barrel on hopes of an end to the West Asia war. A potential slow down in the artificial intelligence trade, with Democrats opposing the growth of data centers, led foreign portfolio investors to buy shares worth $4.06 billion in November through Thursday. This followed heavy selling of $38.66 billion during the rest of the calendar year through October. DK Aggarwal, chairman and managing director of SMC Capitals Ltd, said the Nifty could test its record high of 26,373.20 hit in January by the end of 2026. Rohit Srivastava, founder of IndiaCharts, added that sharp covering of bearish positions in index futures also helped the market recover. NSE data shows foreign portfolio investors covered cumulative index futures shorts by 140,337 contracts down to 100,416 contracts in November through Friday.

Cautious Voices

Not all analysts share the same optimism. Sudhir Joshi, a consultant at Khambatta Securities, warned that drought across many states could push up food inflation and keep borrowing costs high for companies, which might hurt earnings and limit further upside.

Context

Stock markets regularly experience sharp swings driven by a mix of international commodity prices, domestic weather conditions, and shifting positions by large institutional investors. Key psychological milestones like the 25,000 mark often draw heavy trading activity as market participants place short-term bets around weekly expiries.