Informist, Thursday, Jun 2, 2022
By Ankika Biswas
MUMBAI – As shares of Reliance Industries Ltd topped the Nifty 50 gainers’ list today, with bullish bets pouring into the derivatives segment, analysts expect the country’s most valuable company in terms of market capitalisation to continue its outperformance in the near term.
The stock surged nearly 4% intraday as the company’s arm Reliance Brands is set to acquire 40% stake in the India business of toymaker Plastic Legno SPA. The move is expected to further strengthen its play in the toy industry, with British toy retailer Hamleys and home-grown toy brand Rowan under its portfolio.
Open interest of the June futures contract was up 5%, suggesting addition of fresh long positions. Further, premiums across most of its out-of-the-money call options also surged amid a positive bias.
The stock is expected to test 2,800-2,850 rupees in the very near term, said Rajesh Bhosale, a technical analyst at Angel One. He expects the stock to retain its outperformance given its past tendency to do so.
Today, the stock closed over 3% higher at 2,724.30 rupees on the National Stock Exchange.
On the other hand, strong bearish bets were seen in the derivatives counter of Apollo Hospitals Enterprise, which fell over 5% and was the worst hit on the Nifty 50 today. The 14% rise in open interest of the June futures contract implied a sharp build-up of short positions.
The overall trend for the stock has turned negative after it gave up the strong recovery seen in late May, prompting analysts to recommend a ‘sell at rise’ strategy.
The stock is likely to continue its underperformance and test 3,400-3,500 rupees in the near term, Bhosale said. However, he recommended buying the scrip at the 3,400-mark, foreseeing chances of a pullback move from that level.
Today, it closed 5% lower at 3,645.25 rupees.
Meanwhile, analysts expect the headline Nifty 50 to test 16700-16800 points in the very near term, if shares of RIL and information technology companies continue to support, after helping the index snap a two-day losing streak today.
Although rate hike moves by central banks are largely factored in, Bhosale recommended exercising some caution ahead of the Reserve Bank of India’s monetary policy meeting scheduled to be held next week.
Traders were active at the 16700-17000 strike price call options, expiring Jun 9, with their premiums rising 24-27%. Open interest in the June futures contract was also up 8%.
Today, it closed 0.6% higher at 16628 points.
–Nifty 50 Jun closed at 16630, up 121.90 points; 2-point premium to spot index
–Nifty 50 Jul closed at 16650, up 124.75 points; 22-point premium to spot index
–Nifty 50 Aug closed at 16685, up 123.95 points; 57-point premium to spot index
The total turnover in the futures and options segment of the National Stock Exchange was 203.37 trln rupees, much higher than 109.51 trln rupees on Wednesday.
The turnover in index options was 201.21 trln rupees, compared with 107.23 trln rupees in the previous session. The total premium turnover of index and stock options was 426.89 bln rupees, higher than 420.38 bln rupees on Wednesday.
The most-actively traded underlying stocks were Reliance Industries, HDFC Bank, Infosys, ICICI Bank, Tata Steel, Adani Enterprises, Tata Consultancy Services, Tata Motors, Bajaj Finserv, Bajaj Finance. End
Edited by Tanima Banerjee
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