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Informist, Friday, Sep 13, 2024

By Anjana Therese Antony

MUMBAI – Investors were lured to buy out-of-the-money call options of Wipro today, backed by a pick-up in growth momentum in key verticals in the US amid increasing hope that the US Federal Reserve will cut key interest rates next week. The stock hit a near-two-month high of 552.50 rupees on the National Stock Exchange and was the top gainer on the Nifty 50. 

Following an interaction with the company's Chief Executive Officer, Kotak Institutional Equities said growth momentum in the US is picking up, especially in healthcare, banking, financial services and insurance, and hi-tech. "Consistent execution across multiple quarters is the key priority," the broking firm said in its report today. 

Global investors are waiting for the US Fed's decision on key interest rates, due next week. The largely in-line US inflation data for August has raised hopes that the Fed will reduce rates in the upcoming meeting, though there are divided views on whether the quantum of cut will be by 25 basis points or 50 bps. The inflation data came as a relief after lower-than-expected US non-farm payroll employment data and weak manufacturing data which caused fears that the US economy might be slowing down. 

In the options chain of Wipro, premiums on call options of 550-640 rupees expiring Sep 26 rose 40-178%, while those on 550-500 rupees of put options declined 44-59%. The maximum open interest addition is at 560-rupee call and 550-rupee put options. 

However, the overall market took a breather from the US rate-cut optimism and closed slightly lower today. The benchmark indices Nifty 50 and BSE Sensex closed 0.1% lower each at 25356.50 points and 82890.94 points, respectively. The resistance for the 50-stock index is pegged at 25450-25500 points next week, while support is seen at 25300-25750 points, according to technical and derivatives analysts. 

Premiums across call and put options of the Nifty 50 hinted that traders are indecisive about the market's direction, especially in the absence of major triggers and as the market has mostly factored in the possibility of a rate cut in the US. The September futures contract of the index was largely unchanged and open interest declined 0.7% to 14.54 mln. Foreign investors have increased their long positions in index futures to 66% on Thursday from 64% on Monday and is expected to do the same in the coming sessions too, analysts said. 

--Nifty 50 Sep closed at 25363.50, up 7.20 points; 7.00-point discount to spot index

--Nifty 50 Oct closed at 25495.15, up 13.70 points; 138.65-point premium to spot index

--Nifty 50 Nov closed at 25615.00; up 20.85 points; 258.50-point premium to spot index

Bajaj Finance, HDFC Bank, Reliance Industries, ICICI Bank, State Bank of India, Wipro, Tata Motors, Tata Steel, Axis Bank, Vedanta, State Bank of India, Samvardhana Motherson International, Bajaj Finserv, DLF, and Dixon Technologies were the most-actively traded contracts.  End

Edited by Deepshikha Bhardwaj

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