Informist, Tuesday, Mar 22, 2022
By Vivek Kumar
MUMBAI – Traders placed bullish bets on information technology companies today as defensive buying was seen in the sector amid a volatile market. Positive earnings growth outlook also led to build-up of long positions in some companies.
The Nifty IT index rose 2% to close at 36070.45 points, and was among the top sector indices on the National Stock Exchange. Among stocks, Wipro, Infosys, L&T Technology Services, Tata Consultancy Services, Larsen & Toubro Infotech and Tech Mahindra rose 1-4%.
Open interests in the March futures contracts of HCL Technologies, Infosys, TCS and Tech Mahindra rose 1-5%, but fell marginally in Wipro. This indicates that the gains were not just because of short covering but traders adding some long positions as well.
Tech Mahindra was the top gainer in the sector. The stock rose 4% to close at 1,538.20 rupees. The call option premiums of 1,560-, 1,580- and 1,700-rupee strike prices of the stock surged 100-200%.
TCS shares rose 2.1% to 3,700.95 rupees. In the options segment, the counter saw buying of call options and selling of put options.
Rajesh Bhosale, technical and derivatives analyst at Angel One, suggests buying Tech Mahindra and TCS at current levels. He expects Tech Mahindra to move higher towards 1,660 rupees in the near term, and sees TCS heading towards 3,850 rupees from hereon.
Similar to the trend seen in other stocks in the sector, Infosys and Wipro also saw their call option premiums rising and put option premiums falling.
Led by information technology companies, the benchmark Nifty 50 rose 1.2% to close at 17315.50 points. The open interest in its March futures contract rose nearly 6%, as per provisional data.
The trend was mixed in the options segment given that the index continued to see wild swings tracking global crude oil prices and US Federal Reserve’s aggressive rate hike view.
While the call options of 17400 and 17600 points strike prices saw their premiums rising, deep-out-of-the-money call options like 17800 and 17850 points witnessed selling.
On the put side, 16300 and 17000 points strike price contracts witnessed maximum addition of open interest with their premiums falling around 80% each.
The benchmark index will face resistance around 17600 points going ahead followed by 17800 points, analysts said.
–Nifty 50 Mar ended at 17380.90, up 222.25 points; 65.40-point premium to spot index
–Nifty 50 Apr ended at 17434.00, up 218.85 points; 118.50-point premium to spot index
–Nifty 50 May ended at 17473.00, up 216.95 points; 157.50-point premium to spot index
The total turnover in the futures and options segment of the NSE was 76.23 trln rupees, higher than 50.01 trln rupees on Monday.
The turnover in index options was about 71.93 trln rupees, against 46.47 trln rupees in the previous session. The total premium turnover of index and stock options was 470.38 bln rupees compared with 366.51 bln rupees on Monday.
The most actively traded underlying stocks were Reliance Industries, Tata Motors, ICICI Bank, HDFC Bank, Tata Steel, State Bank of India, Vedanta, Infosys, ITC, Hindustan Unilever and TCS. End
Edited by Ashish Shirke
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.
Informist Media Tel +91 (11) 4220-1000
Send comments to [email protected]
© Informist Media Pvt. Ltd. 2022. All rights reserved.
Source: Cogencis
