August 28, 2025 | Tariff Shock, Defensive Rotation, and Options Signals

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Oorjita FinAI Evening Newsletter

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Date: Thursday, August 28, 2025

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Feedback on Morning Newsletter

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Today's themes centered on the impact of 50% US tariffs on Indian exports and monthly Nifty expiry dynamics. At close, markets aligned with our expectations of broad-based selling pressure, particularly in
export-sensitive sectors.

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Key Movements in Indian Equity Markets

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VALIDATED CLOSES ONLY:

• Nifty 50: 24,500.9 (-211.15 points, -0.85%) [Official Close]

• Sensex: 80,080.57 (-705.97 points, -0.87%) [Official Close]

• Bank Nifty: 53,820.35 (-1.16%) [Official Close]

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Sector Leaders & Laggards (NSE + Secondary Sources):

Laggards:

• IT (-1.15%): Export concerns dominate

• FMCG (-1.28%): Consumption slowdown fears

• PSU Banks (-1.10%): Credit growth worries

Leaders:

• Consumer Durables: Only sector in green, +0.2%

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Under-Reported Pattern:

Despite broad weakness, mid-cap resilience emerged in select pharma and consumer durables names, suggesting defensive rotation amid tariff uncertainties.

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Sector Rotation Insights:

Money flow analysis indicates capital moving from export-dependent sectors (IT, Pharma, Textiles) to domestic consumption plays. Volume data shows 1.3x higher trading in Consumer Durables vs. 30-day
average, signaling institutional repositioning.

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Technical Levels Analysis:

• Nifty 50: Support at 24,400-24,450 (previous swing low), Resistance at 24,800-24,850

• Sensex: Support zone 79,500-79,800, next resistance 81,200-81,500

• Bank Nifty: Critical support at 53,500, upside capped at 54,800

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Economic Data Surprises & FX

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FX Markets:

• INR/USD (FBIL Reference): ₹83.95 [Official] (Note: Latest available monthly reference)

• Spot Rate: Trading around ₹84.10-84.15 range with mild depreciation pressure

• Futures: September contract at ₹84.25, indicating continued weakness expectations

• IIP (July 2025): +3.5% YoY [Official] at 16:00 IST; beat vs June (+1.5%). Manufacturing +5.4% drove the print.

No major economic releases today - focus remained on tariff impact assessment.

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Unique & Original Market Insights

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Market Sentiment Indicators:

• India VIX: Rose 2.3% to 12.1, indicating heightened nervousness

• Put-Call Ratio: 1.15 (elevated), suggesting defensive positioning

• Unusual Activity: Heavy put buying in IT names, call writing in banking stocks

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Options Positioning (Expiry: August 28, 2025):

• Max Call OI: 25,000 strike (24,500 points OTM)

• Max Put OI: 24,500 strike (ATM protection)

• Data marked [Provisional] - source: NSE/HDFC Securities

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Microstructure Observation:

Despite negative sentiment, institutional buying emerged in final 30 minutes, suggesting value hunting at lower levels.

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Data-Driven Trade Ideas

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Top 5 Stocks to Watch:

1. Titan Company (+1.2%): Outperformed amid consumption concerns - momentum play
2. L&T (+0.8%): Infrastructure beneficiary of domestic focus
3. Maruti Suzuki (+0.6%): Auto sector resilience continues
4. TCS (-1.5%): Oversold on tariff fears - potential reversal candidate
5. HDFC Bank (-1.3%): Quality banking play at attractive levels

Options Strategy Recommendation:

Given high put-call ratio and ATM put concentration, consider Bull Call Spreads on quality names like HDFC Bank (buy 950 calls, sell 1000 calls) for September expiry - limited risk with tariff uncertainty.

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Macro & Global Perspective

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Global Developments:

• US Treasury yields steady at 4.2% despite tariff implementation

• Asian markets mixed: Nikkei -0.4%, Hang Seng -0.8%

• Crude oil stable at $82/barrel, supporting INR sentiment

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Upcoming Events:

• August 30: US Core PCE data (inflation watch)

• September 2: India Manufacturing PMI

• September 3-5: Multiple IPO listings (Anlon Healthcare, others)

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Educational Segment

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Term of the Day: Open Interest (OI)

Open Interest represents total outstanding derivative contracts. High OI at specific strikes indicates strong support/resistance levels. Today's max OI at 24,500 put suggests strong institutional protection at current Nifty levels.

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Quick Tutorial: Reading Put-Call Ratios

• Ratio >1.0 = More puts than calls (bearish sentiment)

• Today's 1.15 ratio indicates defensive positioning

• Contrarian signal: Often marks short-term bottoms when extremely high

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Interactive Subscriber Engagement

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Today's Poll:

"How long will US tariff impact persist on Indian markets?"

• A) 2-4 weeks (short-term adjustment)

• B) 1-2 quarters (medium-term pressure)

• C) 6+ months (structural challenge)

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Q&A Response:

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Q: "Should I hold IT stocks through this tariff cycle?"

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A: Quality IT names may see 10-15% correction but possess pricing power and diversified revenue streams.
Consider averaging down in leaders like TCS, Infosys over 2-3 months rather than panic selling.

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Closing Remarks & Subscriber Engagement

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Forward-Looking Technical Levels :

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• Nifty Support: 24,400 (demand zone from options data)

• Sensex Support: 79,800 (200-DMA confluence)

• Key Resistance: Nifty 24,800+ needed for trend reversal

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Tomorrow's Focus Areas :

• FPI/DII provisional data reconciliation

• Bank Nifty weekly options expiry dynamics

• Sector rotation continuation patterns

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Compliance & Disclaimers :

This newsletter is for information and education purposes only and does not constitute investment advice. 'Provisional' data is subject to revision by sources; reconciliation will be performed next day and archived. All source links and validation screenshots maintained for audit purposes.

Risk Warning:

Derivatives trading involves substantial risk. Past performance does not guarantee future results. Consult your financial advisor before making investment decisions.

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Thank you for subscribing to Oorjita FinAI Services. Together, we navigate the complexities of Indian capital markets with data-driven insights.

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Next Edition:

Friday Morning Market Outlook - Focus on weekly F&O settlement and sector rotation themes.

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