Sensex Weekly Expiry: Rising US Yields, Crude Oil Give Bears an Edge; Can 71,500 Hold?

Selling pressure deepened on Thursday ahead of the Sensex weekly expiry, dragging the benchmark below the key psychological level of 72,000. At around 1:18 PM, the Sensex was trading near 71,656, down more than 800 points or over 1.1%.

The decline was accompanied by a sharp rise in volatility. India VIX climbed 11.34% to move above the 15 mark, reflecting increased nervousness in the market. A falling index along with a rising volatility gauge usually points to higher demand for protection against further downside and more cautious positioning in the derivatives segment.

Rising US 10-Year Yield and Crude Oil Prices Rattle Indian Market

Weakness in Indian equities came amid an unfavourable global macro backdrop. The US 10-year Treasury yield was trading near 5.33% on Thursday, while the 30-year yield stood around 5.64%. Both remained close to their highest levels since 2002.

Crude oil prices also added to the pressure. Brent crude recovered sharply from the day’s low of $96.62 per barrel and moved back towards the $100 mark. A sustained rise in crude is generally negative for India because of the country’s high dependence on imported oil, with possible implications for inflation, the current account deficit and the rupee.

As the broader macro environment weakened, positioning in the Sensex options market also turned more cautious ahead of the weekly expiry.

PCR Slips to 0.51 as Options Positioning Turns Bearish

A major change during the session was visible in the Put-Call Ratio.

The PCR dropped sharply to 0.51 from 1.04 earlier in the day. The decline suggests that Call open interest has risen at a much faster pace than Put open interest, indicating stronger bearish positioning in the options market.

At the same time, Max Pain shifted lower to 72,000 from 72,500.

The fall in Max Pain shows that the centre of options positioning has moved down along with the index. Since the Sensex is already trading below 72,000, the level now becomes an important near-term reference point and could act as the first hurdle in case of a recovery.

Call Writers Create a Strong Resistance Band

The Call side of the options chain shows fresh open interest building across strikes from 71,500 and above.
The 72,500 Call strike recorded the highest fresh OI addition during the October 1 session, followed by 72,300 and 72,000.

In terms of total Call open interest, 72,500 holds the largest concentration, followed by 72,400.

This has created a heavy Call OI zone between 72,000 and 72,500. Unless the Sensex recovers sharply and Call writers begin to unwind their positions, this band could continue to restrict the upside during the remainder of the weekly expiry session.

Another important development is the build-up of Call positions much closer to the prevailing market price. This indicates that resistance levels are shifting lower as the index weakens, rather than remaining concentrated only at far higher strikes.

Put OI Moves Lower as Traders Look for Support

Put positioning is showing a gradual shift towards lower strikes.

Fresh Put open interest addition is visible at the 71,000 and 70,500 strikes. Near the current market level, the 71,500 and 71,600 Put strikes have also seen some fresh addition.

However, the highest overall Put OI concentration remains at 71,000, followed by 70,000.

This indicates that traders are increasingly looking towards lower levels for stronger support. The 71,000 strike currently stands out as the key options-based support below the prevailing market price, while 70,000 becomes the next major reference level if selling pressure extends further.

The contrast between the Call and Put sides remains important. While aggressive Call writing is visible from 71,500 upwards, the larger Put OI base is placed lower at 71,000 and 70,000. This positioning points to a cautious market where resistance is developing close to the index while stronger support is being built at deeper strikes.

Nifty Weekly Expiry Outlook: What the Expiry Setup Suggests

The current derivatives structure remains skewed towards the bears.

The fall in PCR to 0.51, the shift in Max Pain to 72,000, and heavy Call writing between 72,000 and 72,500 suggest that the upside could remain restricted unless the market witnesses meaningful short covering.

On the downside, 71,500-71,600 is the nearest zone where some Put writing is visible. A sustained move below these levels could bring 71,000 into focus, where the highest Put OI is currently placed.

If 71,000 also fails to provide support, the next important options-based zone lies around 70,500-70,000.
For the bulls, reclaiming 72,000 would be the first sign of easing pressure. However, even above that level, the heavy Call OI concentration around 72,300-72,500 could make the recovery difficult.

With India VIX trading sharply higher, US Treasury yields remaining elevated and crude oil hovering near the $100 mark, volatility may stay high through the final hours of the Sensex weekly expiry. For now, the options chain suggests that resistance has shifted closer to the market, while stronger support is positioned at lower strikes.