Informist, Tuesday, Jun 28, 2022
By Vaibhavi
NEW DELHI – Bullish bets flooded the derivatives segment of Mahindra & Mahindra today as the launch of the company’s new sport utility vehicle, Scorpio N, prompted strong growth outlook from several brokerages, lifting the sentiment for the stock.
Shares of the company tested a lifetime high of 1,121.45 rupees in today’s session. Accordingly, analysts see more gains on the cards for the automaker.
Premiums across out-of-the-money call options of the 1,120- to 1,210-rupee strike prices jumped sharply as traders turned active at those levels, betting on hopes of further gains in the stock.
Sustained buying is likely to lift the stock to test new record highs around the 1,170-rupee level in the near term, said Ajit Mishra, vice-president-research, Religare Broking.
While profit booking after a four-day upward streak can’t be ruled out, Mishra believes that it is unlikely to have much bearing on the positive momentum for the stock as its downside seems limited.
Among put options, 1,050- and 1,060-rupee strike prices held the maximum concentration of open interest, suggesting strong support coming in from that zone.
Long positions were also added in the June futures of the stock as open interest shot up over 8%.
Today, the scrip ended at 1,112 rupees, or 2.7% higher.
On the other hand, a spike in crude prices triggered concerns of profitability going for a toss for paint companies, which weighed on Asian Paints, pulling it down over 4%.
Traders placed bearish bets in the derivatives segment of the paint maker, anticipating more losses.
The stock snapped a three-day winning streak today. Persistent selling pressure can see it slipping to 2,600-2,650 rupees, said Rajesh Bhosale, technical and derivatives analyst, Angel One.
The view was reaffirmed by put options data as the 2,650-rupee contract garnered the maximum open interest addition, while the 2,600-rupee strike price witnessed the highest concentration of positions.
Foreseeing a further fall, traders aggressively added short positions in the June futures contract of the stock as indicated by the over 17% jump in open interest.
Today, the stock ended 3.4% lower at 2,726.50 rupees after falling to a low of 2,704.30 rupees earlier in the day.
Meanwhile, the Nifty 50 witnessed a volatile session as it swung between gains and losses.
The index opened lower, mirroring most global markets that fell amid concerns around rising crude prices. However, reports of China easing COVID restrictions somewhat lifted the sentiment, helping the Nifty 50 recover and end with marginal gains.
Investors refrained from taking aggressive bets amid the unclear trajectory for the index. Therefore, analysts see the Nifty 50 consolidating until it decisively breaks out of 15900 points, a key resistance level.
Managing to surpass its resistance level can lift the index higher towards 16200 points, analysts said. Backing the view was the significant addition of open interest across the 15900-16200 strike price call options.
On the downside, 15600-15700 points remain a key support zone for the index as the put options of these strike prices held substantial open interest.
Today, the Nifty 50 hit a low of 15710.15 points before some buying interest lifted it to a high of 15892.10 points. The index eventually closed with 0.1% gains at 15850.20 points.
–Nifty 50 Jun closed at 15859.00, up 23.45 points; 8.80-point premium to spot index
–Nifty 50 Jul closed at 15860.00, up 18.95 points; 9.80-point premium to spot index
–Nifty 50 Aug closed at 15892.00, up 20.25 points; 41.80-point premium to spot index
The total turnover in the futures and options segment of the National Stock Exchange was 69.54 trln rupees compared with 66.08 trln rupees on Monday.
The turnover in index options was 65.62 trln rupees, higher than 61.84 trln rupees in the previous session. The total premium turnover of index and stock options was 325.23 bln rupees compared with 357.13 bln rupees on Monday.
The most-actively traded underlying stocks were Reliance Industries, ICICI Bank, HDFC Bank, Infosys, Maruti Suzuki, Axis Bank, Housing Development Finance Corp, Mahindra & Mahindra, Adani Entertainment and Bharti Airtel.
End
Edited by Namrata Rao
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