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Equity Futures:Hindalco may gain more on covering of short positions

Informist, Thursday, Jul 7, 2022


By Ankika Biswas


MUMBAI – Traders covered their short positions and added fresh long positions in Hindalco Industries today as the stock jumped over 6%, topping the Nifty 50 gainers list. Hopes of improved demand lifted the metal pack sharply in the final hour of trade.


China’s plans to ramp up infrastructure boosted the demand outlook for metals, spurring hopes of a pickup in their prices. China is the leading consumer of major base metals such as steel, copper, and aluminium.


Open interest in the July futures contract was up over 7%. Further, premiums nearly trebled across the 365- to 380-rupee strike price call options.


Analysts said that the short-term view for Hindalco’s stock is positive as it closed above its 20-day moving average of 352 rupees today for the first time in four months. The scrip closed over 6% higher at 361.65 rupees.


Going ahead, they expect a further pullback towards 385 rupees due to continued covering of short positions.


Among other stocks in the metal pack, bullish bets were seen in the futures segment of National Aluminium Co, Tata Steel, JSW Steel and Hindustan Copper.


As for the Nifty 50, which closed comfortably above the 16100-point mark, analysts expect further gains. Sustained buying may help it test 16250-16300 points, they added.


Analysts noted that the 16100-point level will act as the new support zone for the index. This view was backed by the strong open interest addition at that strike price put option.


Today, the index closed 0.9% higher at 16132.90 points, while open interest in the July futures contract was down by over 1%. 


–Nifty 50 Jul closed at 16161.00, up 170.55 points; 28.10-point premium to spot index

–Nifty 50 Aug closed at 16181.00, up 168.25 points; 48.10-point premium to spot index

–Nifty 50 Sep closed at 16225.85, up 173.95 points; 92.95-point premium to spot index


The total turnover in the futures and options segment of the National Stock Exchange surged to 214.8 trln rupees today from 128 trln rupees on Wednesday. 


At 212.3 trln rupees, the turnover in the index options was higher than 125.41 trln rupees in the previous session. The total premium turnover of index and stock options was slightly lower at 435.9 bln rupees compared with 455.10 bln rupees on Wednesday.  


Reliance Industries, HDFC Bank, Tata Steel, ICICI Bank, Tata Motors, Titan Co, Bajaj Finance and Tata Consultancy Services were the most actively traded underlying stocks today.  End


Edited by Namrata Rao


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Cogencis news is now Informist news. 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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