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Equity Futures:F&O data suggest further gains on cards for L&T, HPCL

Informist, Wednesday, Nov 3, 2021


By Ankika Biswas


MUMBAI– Strong bullish bets were seen in the derivatives segment of Larsen & Toubro today following the stock’s strong resilience amid a weak market trend. Investors bought the November futures contract on hopes of further gains in the stock, which saw the open interest soar over 10%.


Traders also heavily bought the deep out-of-the-money call options of 1,940-, 2,000- and 2,100-rupee strike prices of the stock, resulting in a 37-105% surge in their premiums.


Positioning in the derivatives segment coupled with strong volumes suggest that the stock may soon hit the 2,000-rupee mark, said Rajesh Bhosale, a technical and derivative analyst at Angel One, formerly known as Angel Broking. He recommended buying the stock at current levels as well as at dips towards 1,850-1,860 rupees.


In the spot market, the scrip closed 4% higher at 1,889.50 rupees, after scaling a lifetime high of 1,915 rupees in early trade.


Bullish bets were also witnessed in Hindustan Petroleum Corp, as the stock rebounded in the spot market in today’s session. The over 8% uptick in the open interest of the November futures contract suggested the build-up of long positions.


Analysts believe that the stock is likely to rise further to 330 rupees, advising investors to buy the scrip at current levels. Today, it closed nearly 4% higher at 314.20 rupees.


Meanwhile, investors sold the November futures contract of Bharti Airtel today, as the stock gave up its strong gains amid profit booking. The scrip had risen to a six-week high in early trade on strong Jul-Sep earnings.


The 12% uptick in the open interest of the November futures contract suggested the build-up of short positions, as investors feared a further correction in the stock. 


Given that the positive momentum in the stock fizzled out, Bhosale does not see any major move on either side and expects it to trade in a range of 680-740 rupees going forward. Today, the stock closed over 2% lower at 699.10 rupees, after rising to 732.50 rupees in early trade.


As for the headline index, the Nifty 50 fell for the second session today due to sharp losses in the banking pack. Further, caution ahead of the US Federal Reserve’s policy meeting outcome later today and the long weekend added to the volatility in the market.


The 50-stock index closed 0.3% lower at 17829.20 points, after touching an intra-day high of 17988.75 points. The open interest in the November futures contract of the index was up over 2%.


Traders also sold the out-of-the-money call options of 18000, 18300 and 18500 strike prices, expiring on Nov 11, resulting in a 40-67% fall in their premiums. Given the persistent selling pressure at higher levels, analysts cited difficulties for the index to close above the 18000-point mark going forward.


Barring the ‘Muhurat’ trading for an hour on Thursday, markets will be closed for the rest of the week for Diwali.


-–Nifty 50 Nov ended at 17862.95, down 53.30 points; 33.75-point premium to spot index

-–Nifty 50 Dec ended at 17924.35, down 55.50 points; 95.15-point premium to spot index

-–Nifty 50 Jan ended at 17981.50, down 51.15 points; 152.30-point premium to spot index


Total turnover in the futures and options segment of the NSE was at 149.95 trln rupees today, sharply higher than the 72.5 trln rupees on Tuesday. 


The turnover in index options was at 146.95 trln rupees compared with 69.7 trln rupees in the previous session. The total premium turnover of index and stock options was 341.01 bln rupees, higher than the 281.59 bln rupees on Tuesday.


State Bank of India, Bharti Airtel, Reliance Industries, L&T, ICICI Bank, Tata Motors, Tata Steel and Bank of Baroda were some most-actively traded underlying today. End


Edited by Pranav S. Joshi


Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.


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Source: Cogencis

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