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Informist, Thursday, Aug 29, 2024

By Apoorva Choubey

MUMBAI – Traders added long bets in the September futures and call options of Reliance Industries Ltd, as India's most-valued company announced it would mull an issue of bonus shares next week, in the ratio of one-for-one. Call options were bought across the board, suggesting that RIL shares may gain further after hitting a one-month high of 3,074 rupees today. 

The September futures of RIL saw open interest jump a massive 41.5% to 51.2 mln. In the cash market, the stock ended off highs at 3,041.85 rupees on the National Stock Exchange with gains of 1.5%.

Comments from Chairman Mukesh Ambani at the company's annual general meeting also boosted sentiment. RIL will join the league of the top 30 most-valued companies in the world in the near future, with its fast-growing telecom and retail businesses poised to double their revenues and operating profits over the next 3-4 years, Ambani said.

RIL remains India's largest listed company with a market capitalisation of around $250 bln. "Reliance took over two decades to be amongst the top 500 companies globally. The following two decades saw us joining the league of the world's top 50 most valuable companies. With our strategic adoption of deep-tech and advance manufacturing, I can clearly see Reliance earning a place in the top-30 league," Ambani said.

Traders bought the 3,100 and 3,200 rupee strike price call options of RIL aggressively. As these were the most actively traded, the stock could test these levels, according to analysts.

Meanwhile, the overall market saw volatility today as it was the last day of the August derivatives series. The options market maintained its bullish stance for the fourth consecutive day, with more puts being written than calls, highlighted SAMCO Securities in a note.

The Nifty 50 has managed to close above the 25000 level every day this week, which is seen as a strong sign. Significant open interest at the 25100 put option of the index and the 25200 call option indicate a tight battle between buyers and sellers, according to SAMCO Securities.

Rollovers to the September series were strong with foreign investors likely adding more bullish positions than bearish, said market participants. The recent buying by foreign investors in both cash and derivatives markets signals a reversal of sentiment, as growing hopes of a rate cut by the US Federal Reserve have bolstered global risk appetite in the last fortnight. 

The Nifty 50 closed at 25151.95 points, up 99.60 points or 0.4%. The September futures contract of the Nifty 50 closed at a premium of 118.05 points to the spot index. Open interest in the contract rose 56.18% to 13.67 mln, according to provisional data.

--Nifty 50 Sep closed at 25270.00, up 108.40 points

--Nifty 50 Oct closed at 25381.00, up 99.70 points; 229.05-point premium to spot index

HDFC Bank, Reliance Industries, Tata Motors, InterGlobe Aviation, ICICI Bank, Infosys, State Bank of India, Bharti Airtel, ITC, Axis Bank, Adani Enterprises, and Kotak Mahindra Bank were among the most actively traded contracts.  End

Edited by Rajeev Pai

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