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Informist, Friday, Dec. 13, 2024

By Apoorva Choubey

MUMBAI – Bharti Airtel witnessed the addition of bullish bets in its December futures and options, as brokerage Jefferies India reportedly named the stock as one of its top picks for 2025. Traders bought call options of the stock for the second day in a row, in the backdrop of expectation that the telecom industry's average revenue per user could rise further over the next three-six months, especially after market leader and trend-setter Reliance Jio Infocomm unveiled a dearer plan for customers, experts said. 

Open interest in the December futures of Bharti Airtel jumped nearly 9% to 52.1 million. Shares of the company closed 4.4% higher at INR 1,681.75 in the spot market. Brokerage Jefferies reportedly sees an upside potential of 18% for the shares, and has an "overweight" rating for the stock. 

Call options of Bharti Airtel were bought across strikes, indicating that market participants expect the stock to rise further in the near term. The INR 1,700 and 1,740 strikes were actively bought, which suggests that the stock could test these levels in the coming days.

Similar trends were seen in the counter on Thursday too, according to analysts. Reliance Jio's New Year Welcome Plan effectively hikes the company's tariffs for its subscribers, reports said on Thursday. The new recharge plan will charge Jio mobility users INR 2,025 for 200 days, compared with INR 3,599 for 365 days earlier. Calculations suggest that the new plan charges users INR 10.125 per day compared to INR 9.86 earlier, according to reports.

On the put side, Bharti Airtel witnessed writing, in-line with the bullish bias. The INR 1,600 strike price was actively sold, thus, implying that the level would be a key support for the shares. 

Bullish positions were seen in the options of the Nifty 50 too, as domestic buying in sectors such as consumer staples, information technology and banking helped the spot index recoup losses for the day. Indian equities had opened lower following the weakness across Asian markets, which posted steep losses due to a stronger dollar, rising US treasury yields and continued scepticism over China's economic revival, according to Siddhartha Khemka, head of research, wealth management, Motilal Oswal Financial Services.

US treasury yields have surged to their highest levels this year, dampening hopes for significant rate cuts by the Federal Reserve going ahead, at time when crude oil prices are rising. "We expect markets to consolidate in a broader range with gradual upmove likely on the back of sector rotation and stock-specific action," he said. 

The index closed at 24768.30, up 219.60 points or 0.9%. Open interest in the December futures of the Nifty 50 rose 0.4% to 11.16 million. Over the next week, investors will keenly monitor the Fed's policy meeting, and economic data, including manufacturing and services data in the US and India, as well as domestic wholesale inflation trends. 

Options market signals a neutral to slightly bullish sentiment, with call and put writing in balance, said Dhupesh Dhameja, derivatives analyst, SAMCO Securities. The 25000 strike price call option holds the highest open interest and remains a key resistance level for the Nifty 50, while the 24500 strike price put option exhibits considerable open interest, indicating solid support, he added. 

The uptick in put writing between 24500 and 24700 highlights increasing bullish pressure, while the unwinding of call positions at lower strikes signals improving sentiment, Dhameja said. The put-call ratio rose to 0.88 from 0.78, reflecting a gradual tilt toward the bulls, although call writers still dominate higher levels, he noted. 

--Nifty 50 Dec closed at 24860.00, up 211.45 points; 91.70-point premium to spot index

--Nifty 50 Jan closed at 25035.50, up 206.20 points; 267.20-point premium to spot index

--Nifty 50 Feb closed at 25180.00, up 199.30 points; 411.70-point premium to spot index

Reliance Industries, HDFC Bank, Bharti Airtel, ICICI Bank, Axis Bank, State Bank of India, ITC, Infosys, Bajaj Finance, Hindustan Aeronautics, Larsen & Toubro, Tata Motors, Dixon Technologies India, Kotak Mahindra Bank and Tata Steel were the most actively traded contracts.  End

Edited by Akul Nishant Akhoury

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