Pre Market Report 09-Sep-2025

Summary of Pre Market Report 09-Sep-2025

Main Financial Strategies and Market Analyses:

• Market Sentiment & Recent Trends:
  • Over the last 11 trading sessions, Nifty fell more than 200 points intraday on five occasions.
  • Despite a generally silent market yesterday, Nifty dropped over 100 points in the last hour of trading.
  • Foreign Institutional Investors (FIIs) continue to sell, but this selling is nuanced due to IPO share allocations and hedging strategies.
  • Weekly IPOs raise about ₹10,000 crore, with FIIs allotted roughly ₹3,000-4,000 crore, which may lead to secondary market selling.
  • FIIs’ selling is larger than just IPO-related selling, indicating broader market pressure.
• Outlook Shift:
  • The presenter, Pia Sundar, has shifted her tone from bearish to slightly bullish, anticipating a positive bias in the market this week.
  • Macro factors such as easing US-India trade tensions and China’s criticism of tariffs on India provide some support.
  • Mixed geopolitical news with both positive and negative developments influencing market sentiment.
• Infosys Share Buyback Impact:
  • Infosys announced a board meeting on September 11 to decide on a share buyback.
  • Share buybacks are common in IT companies, which are cash-rich and less capital-intensive.
  • Infosys’s share price fell 0.5% yesterday, contributing about 10 points to Nifty’s fall, implying a 1% move could impact Nifty by 20 points.
  • After-hours, Infosys ADR rose 2.5%, signaling potential for a 3% rise in the Indian market.
  • A 3% rise in Infosys could add 50-60 points to Nifty; combined with other IT stocks (TCS, Tech Mahindra, HCL Tech, Wipro), the IT sector could add 80-100 points.
  • Other sectors: FMCG is under profit booking; Auto sector gained 3% but has low Nifty weightage; Banking showed positive buying with HDFC Bank holding firm.
• Trading Strategies & Hedging:
  • FIIs maintain about 92-93% short positions, which might be hedges rather than outright bearish bets.
  • Pia shares her personal approach to hedging:
    • When bullish: Long futures + sell far out-of-the-money call options (double quantity).
    • When bearish: Short futures + sell far out-of-the-money put options (double quantity).
    • This strategy provides a buffer against adverse moves.
  • December futures (though not actively trading) can still be shorted for hedging purposes.
• Market Expectations:
  • Nifty has potential to close above 25,000 in the near term, especially if Infosys buyback news triggers IT sector rally.
  • Market volatility expected around weekly expiry and news-based movements.
  • A confirmed bullish signal would be a Nifty close above 25,100 on a closing basis (not intraday).

Step-by-Step Guide to Pia Sundar’s Hedging Strategy:

• If bullish:
  • Go long on futures contracts.
  • Sell call options at a strike price far above the current price, double the quantity of futures.
• If bearish:
  • Go short on futures contracts (preferably longer-dated like December).
  • Sell put options at a strike price far below the current price, double the quantity of futures.
• This approach creates a buffer zone to manage risk if the market moves against the initial position.

Presenters/Sources:

• Pia Sundar (Presenter and Analyst)
• Sponsored by Delta.exchange

This summary encapsulates the market overview, key sectoral insights, trading strategies, and outlook shared in the Pre Market Report dated 09-Sep-2025.