Informist, Monday, Nov 1, 2021
By Ankika Biswas
MUMBAI – Bulls made a comeback into the market today as a sharp correction across sectors last week lured them to buy the stocks at cheaper levels. Aided by an across-the-board recovery, the Nifty 50 notched strong gains and finally closed above the 17900-point mark, which prompted investors to place bullish bets in the index’s derivatives segment.
The over 3% uptick in the open interest of the November futures contract suggested the build-up of long positions, as investors eyed further gains in the headline index.
Additionally, the near out-of-the-money call options at 18100, 18200 and 18250 strike prices were also bought, which are expected to act as near-term resistances. The premiums on these contracts rose 16-95% today.
“As long as the Nifty 50 doesn’t close below the 17600-point mark, the positive near-term outlook for the index remains intact, and it is likely to rise further to 18200-18300 points,” said an analyst at Axis Securities.
After correcting 5% on Friday from its record high of 18604.45 points and slipping below multiple support zones, the Nifty 50 witnessed a strong recovery today with banks, information technology and consumer goods at the forefront of the buying interest.
Snapping a three-day losing streak, the 50-stock index closed 1.5% higher at 17929.65 points after touching an intraday high of 17954.10 points.
With corporate earnings in full swing, action in the market continued to be stock-specific. A robust set of quarterly numbers lifted stocks such as Indian Railway Catering and Tourism Corp, Oberoi Realty, Steel Authority of India and Housing Development Finance Corp in the spot market, while also triggering buying of their November futures contract.
Open interest in the November futures contract of IRCTC surged 18%, following gains in the spot market, suggesting the build-up of long positions. Robust Jul-Sep earnings helped the stock recover from its initial losses and close over 1% higher at 855.45 rupees.
As long as the stock remains firm above the 800-rupee mark, it is likely to rise further to 900-950 rupees, the analyst from Axis Securities said.
On Friday, the stock had tanked 30% intraday after the government said that the company was to share half of its convenience fee revenue with the railway ministry. However, soon after the stock nosedived in the spot market, the government withdrew its directive, following which the shares had recouped most of the losses but closed over 7% lower.
Meanwhile, below-expectation consolidated net profit in Jul-Sep pulled down shares of UPL in the spot market, prompting investors to place bearish bets in the derivates segment. Open interest in the November futures contract was up over 5%, suggesting a build-up of short positions.
The stock closed nearly 3% lower at 720.05 rupees.
-–Nifty 50 Nov ended at 18017, up 301.70 points; 87.35-point premium to spot index
-–Nifty 50 Dec ended at 18079, up 290.85 points; 149.35-point premium to spot index
-–Nifty 50 Jan ended at 18135, up 295.10 points; 205.35-point premium to spot index
Total turnover in the futures and options segment of the NSE was at 55.64 trln rupees today, lower than 58.2 trln rupees on Friday.
The turnover in index options was at 52.63 trln rupees compared with 54.7 trln rupees in the previous session. The total premium turnover of index and stock options was 281.70 bln rupees, lower than the 384.8 bln rupees on Friday.
Reliance Industries, Bharti Airtel, IRCTC, Tata Motors, State Bank of India, SAIL, Tata Steel, and ICICI Bank were the other most-actively traded underlyings today. End
Edited by Snigdha Kuttikat
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Source: Cogencis
