Informist, Thursday, Dec 9, 2021
By Vivek Kumar
MUMBAI – The renewed buzz of value unlocking for its non-core businesses turned punters active in ITC today as it marked its biggest gains in more than two months. This also reflected in the derivatives segment, where the value of the stock’s major out-of-the-money call options more than trebled.
But the jury is still out on whether the company will move its cards on this front. The investors have pinned their hopes on the company’s first-ever analyst meet, scheduled this Tuesday.
Along with demerger of hotel business, the company may also look at integrating its fast-moving consumer goods brands and acquire new direct-to-consumer brands in this segment going ahead, reports said.
These prospects lifted investor sentiment towards the cigarette manufacturing company. Its stock rose 4.7% to close at 235.40 rupees in the cash market today.
In the stock’s options, the premiums of 240 and 245 rupees call options more than trebled and also witnessed maximum addition of open interest. Even deeper out-of-the-money call options like 270 and 280 rupees saw their premiums surging over 200% and 150%,respectively.
The stock has seen a good build-up of long positions along with unwinding at 220 and 230 rupees put options, which indicates a further upmove towards 250-260 rupees level, an analyst with Axis Securities said.
Apart from ITC, another heavyweight stock, Reliance Industries, also rose today amid good growth prospects for its new energy business. It ended 1.6% higher at 2,456.45 rupees.
The premiums of out-of-the-money call options of the stock rose today, while those of put options fell.
The gains in these two heavyweight stocks helped benchmark indices end marginally higher today. Analysts expect the headline indices to trade in a narrow range given sharp gains in the previous two sessions and caution ahead of the US Federal Reserve’s policy meeting next week.
While the data is not negative, the next leg of upmove will depend on how the fresh long formations happen, said Ruchit Jain, trading strategist at 5paisa.com. If fresh long positions are added in banks, the Nifty 50 may continue the positive momentum seen in the last two days.
The Nifty 50 closed 0.3% higher at 17516.85 points today. The open interest in the December futures contract also rose 4.6% to 11.6 mln.
-–Nifty 50 Dec ended at 17557.00, up 43.35 points; 40.15-point premium to spot index
-–Nifty 50 Jan ended at 17619.00, up 50.35 points; 102.15-point premium to spot index
-–Nifty 50 Feb ended at 17646.05, up 45.40 points; 129.20-point premium to spot index
The total turnover in the futures and options segment of the NSE was 151.1 trln rupees today, compared with 72.04 trln rupees on Wednesday.
The turnover in index options was higher at 148.7 trln rupees as against 69.44 trln rupees on the previous day, with the weekly derivatives contracts expiring today.
The total premium turnover of index and stock options was also higher at 309.4 bln rupees compared with 280.63 bln rupees on Wednesday.
ITC, Reliance Industries, ICICI Bank, Vodafone Idea, HDFC Bank, Zee Entertainment Enterprises, Kotak Mahhindra Bank, Tata Motors, Larsen & Toubro, Escorts, Bajaj Finance, Bharti Airtel, Axis Bank and Tata Steel were some of the most actively traded underlying stocks. End
Edited by Pranav S. Joshi
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