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Informist, Friday, Sep 27, 2024

By Anjana Therese Antony

MUMBAI – The weakness in international crude oil prices made traders bet on more upside for oil marketing player Bharat Petroleum Corp, which closed a whopping 6.4% higher at 367.30 rupees today, the top most in the Nifty 50 index. The stock rose for the sixth straight session, gaining 13% during that time period. While premiums on out-of-the-money call options of BPCL more than doubled, those on put contracts halved. 

Crude oil is a key raw material for refining companies and the surge in its prices had hit their refining margins and profits in the previous quarters. The recent weakness in crude oil prices was prompted by fading oversupply concerns after the Organization of the Petroleum Exporting Countries and allies revised their demand outlook downward for 2024 and 2025. Also, reports said that Saudi Arabia, the world's largest exporter, is willing to abandon its unofficial $100-per-barrel price target and increase production in December, even if it results in continued lower prices. The Brent Crude November contract traded on the Intercontinental Exchange fell to around $70 per barrel from $75 a barrel a week ago. This is also much lower than the $90-per-barrel mark it hit in April during the geopolitical tensions in West Asia.

In the options chain of the stock, premiums on 370-440 rupees call options expiring on Oct 31 rose 150-228% and those on 260-280 rupees put contracts declined 20-52%. The maximum open interest addition is at 370-rupee call and 360-rupee put options. 

For the overall Indian equity market, analysts expect periodic corrections in the near term, especially as valuations remain expensive. The benchmark indices hit fresh record highs every day this week. Today, the Nifty 50 hit an all-time high of 26277.35 points and the BSE Sensex hit a lifetime high of 85978.25 points.

The 50-stock index closed 0.1% lower at 26178.95 points and the 30-stock index ended 0.3% lower at 85571.85 points. Near-term support for the index is pegged at 26000-25980 points and resistance at 26250-26300 points, according to technical and derivatives analysts at different broking firms. 

The options chain of Nifty 50 showed that traders were indecisive about the market's direction Monday in the absence of major triggers. Premiums on out-of-the-money call and put contracts expiring next week declined around 20-50%. The maximum addition of open interest was at 27000-point call and 25000-point put contracts. 

While stretched valuations are likely to keep gains under check, robust earnings and festival season, and strong foreign inflows could aid the market in the medium term, analysts said. The government's thrust to improve rural consumption is also expected to provide support for companies dependent on rural demand, such as fast-moving consumer goods and automobile, they said. 

--Nifty 50 Oct closed at 26345.60, up 36.75 points; 166.65-point premium to spot index

--Nifty 50 Nov closed at 26460.00, up 57.65 points; 281.05-point premium to spot index

--Nifty 50 Dec closed at 26564.00, down 133.55 points; 385.05-point premium to spot index

Reliance Industries, HDFC Bank, Infosys, ICICI Bank, Trent, Bharat Electronics, LTIMindtree, Tata Power, State Bank of India, Tata Consultancy Services, NTPC, Polycab India, Mahindra & Mahindra, Vedanta, Tata Steel, Bharat Petroleum Corp, and Hindustan Aeronautics were the most-actively traded contracts.  End

Edited by Akul Nishant Akhoury

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