Informist, Monday, Jan 2, 2023
By Vaibhavi
NEW DELHI – Metal counters were the best performers today as a decision by the Chinese government to support its battered property sector sparked hope of improved demand for these companies. As a result, the metal pack not only rose sharply in the cash market, traders also aggressively added bullish bets in the derivatives segment on hopes of a further upswing.
Most stocks in the sector rose today, but it was the 3-8% rise in Steel Authority of India, MOIL, Hindustan Copper, Tata Steel, Jindal Stainless, National Aluminium Co and Hindalco Industries that lifted the Nifty Metal index up nearly 3% to a record high of 6907.35 points.
Similar enthusiasm was seen in the derivatives segment of the metals pack, as traders added fresh long positions across the futures segment of Steel Authority of India, Hindustan Copper, Tata Steel, JSW Steel, National Aluminium Co and Hindalco Industries. Open interest in the January futures contract of these counters jumped 4-14%, with Tata Steel witnessing the most additions of long positions.
Going by the kind of bullish bets seen across these counters, stocks in the metal pack seem to have 10-12% more upside potential in the near term, said Rupak De, technical and derivatives analyst at LKP Securities. De was more bullish on Tata Steel, as he expects the stock to test levels of 136-140 rupees in the coming sessions.
Strong buying was also witnessed across out-of-the-money call options of Tata Steel, which sharply lifted premiums across those contracts.
Call options of the 120-133-rupee strike prices witnessed the maximum addition of open interest, which suggests traders expect strong returns from the counter.
Foreseeing stronger returns in the near term, De also suggests investors to add long positions in metal stocks.
As for the Nifty 50, the index is poised to face multiple upside hurdles as it attempts to stage a sustainable recovery. The immediate hurdle for the Nifty 50 is at 18200 points, as indicated by call options data, which showed the contract of that strike price held the highest open interest.
A decisive close above that level will trigger more gains towards 18300-18400 points, a zone where the Nifty 50 is likely to face another strong resistance.
On the downside, support remains intact at 18000-18100 points. The put options of 18000 garnered the maximum addition of fresh positions.
Today, the Nifty 50 ended 0.5% higher at 18197.45 points.
–Nifty 50 Jan closed at 18278.70, up 71.85 points; 81.25-point premium to spot index
–Nifty 50 Feb closed at 18301.50, up 66.25 points; 159.55-point premium to spot index
–Nifty 50 Mar closed at 18439.10, up 70.25 points; 241.65-point premium to spot index
The total turnover in the futures and options segment of the National Stock Exchange was 116.07 trln rupees, against 103.81 trln rupees on Friday.
The turnover in index options was 113.93 trln rupees compared with 101.35 trln rupees in the previous session. The total premium turnover of index and stock options was 445.84 bln rupees compared with 475.56 bln rupees on Friday.
Tata Steel, Hindalco Industries, State Bank of India, Bajaj Finance, Steel Authority of India, Reliance Industries, Canara Bank, HDFC Bank, ICICI Bank, and Axis Bank, were among the most actively traded underlying stocks. End
Edited by Avishek Dutta
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