Informist, Friday, Jan 7, 2022
By Ankika Biswas
MUMBAI – Playing on strong growth prospects, the shares of Grasim Industries surged over 5% to a one-month high of 1,807 rupees today, which saw the premiums on its out-of-the-money call options surge three-fold.
The gains trickled in as brokerage Motilal Oswal upgraded its rating on the stock to ‘buy’ from ‘neutral’ on the back of improving core business and strong growth prospects for the paint business.
As the premiums across the 1,800-2,000-rupee strike price call options surged, those on most of the out-of-the-money put options fell over 43%. Bullish bets were also seen in the futures segment, as indicated by the 2% rise in open interest of the January futures contract.
Analysts believe that the stock is likely to gain further towards 1,900 rupees. They recommend that investors use any dips towards its support of 1,770 rupees as an opportunity to buy the stock.
Today, the stock closed over 4% higher at 1,797.65 rupees.
As for the headline index, the Nifty 50 managed to shrug off the initial losses and reclaim the key 17800-point mark, as banks and information technology stocks held their ground. Further, the index ended the first week of the year with a 3% upmove, on strong gains in banking and information technology companies amid hopes of strong Oct-Dec earnings.
Maintaining a positive bias, analysts said if the index manages to decisively surpass its key level of 18000 points, it is likely to test new all-time highs. The index had scaled its historical high of 18604.45 points on Oct 19, 2021.
Analysts recommend that investors buy into the index on dips towards its support of 17700-17600. Today, the index closed 0.4% higher at 17812.70 points, after moving between an intra-day low and high of 17704.55 points and 17905 points, respectively.
In the derivatives segment, the premiums on the 17900 and 18000-strike price call options rose today amid some expectations of the 50-stock index testing those levels in the coming week. Meanwhile, the action in the futures segment was quite muted.
-–Nifty 50 Jan ended at 17855.15, up 66.50 points; 42.45-point premium to spot index
-–Nifty 50 Feb ended at 17907.80, up 67.85 points; 95.10-point premium to spot index
-–Nifty 50 Mar ended at 17955.50, up 63.40 points; 142.80-point premium to spot index
The total turnover in the futures and options segment of the NSE was at 57.6 trln rupees, significantly lower than the 177.6 trln rupees on Thursday.
The turnover in index options was at 54.6 trln rupees against 174.9 trln rupees the previous day. The total premium turnover of index and stock options was at 364.33 bln rupees, compared to 367.6 bln rupees on Thursday.
Among the most actively traded underlying stocks were ICICI Bank, Titan Co, Reliance Industries, Tata Power, State Bank of India, Tata Consultancy Services, Infosys and HDFC Bank. End
Edited by Michael Correya
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Source: Cogencis
