Informist, Friday, Mar 11, 2022
By Joe Milton
MUMBAI – Shares of pharmaceutical stocks gained sharply as investors shifted to defensive counters, which prompted traders to aggressively place bullish bets in frontline drug markers.
Shares of Cipla surged nearly 7% and touched their all-time high of 1,053.75 rupees with the addition of long positions in the derivative segment.
Open interest in the March futures of Cipla jumped nearly 20% to 10.4 mln, while the stock closed 5.8% higher at 1,043.95 rupees.
As the stock managed to breakout from its consolidation zone of 850-1,005 rupees, call option traders closed their positions across 980-1,000 rupees strike price.
The highest open interest in the call option segment of Cipla was at 1,100 rupee strike price and correspondingly the highest open interest in the put options was at 900 rupee strike price.
The momentum remains positive and traders should use dips to add long positions in Cipla, said Rajesh Bhosale, technical and derivative analyst at Angel One. He expects shares of Cipla to head towards 1,120 rupees in coming sessions.
Besides Cipla, shares of Sun Pharmaceutical Industries gained 4.4% to an over six-year high of 907 rupees. Alongside, traders added long positions in the March futures of the stock with open interest in the contract surging nearly 10% to 21.8 mln.
In the call options segment of Sun Pharmaceuticals, the highest open interest was at 900 rupees strike price and today the stock closed above this level at 902 rupees.
Analysts expect the uptrend in Sun Pharmaceuticals to continue and hit the 1,000-rupee mark in the near term.
Most pharmaceutical stocks gained today as investors churned their money towards the sector. The Nifty Pharma index was the top gainer among sectoral indices and analysts at ICICI Securities believe that the index is on the cusp of resolving out of eight months of consolidation.
The gains in pharmaceutical stocks helped the Nifty 50 index to end the volatile session in green. The 50-stock index touched an intraday high of 16694.40 points but failed to sustain at high levels due to selling pressure.
Open interest in the March futures of Nifty 50 gained nearly 6% to 12.7 mln, while the index closed 0.2% higher at 16630.45 points.
Analysts suggested that traders can add long positions in the Nifty 50 if the index decisively crosses 16700 points.
On the other hand, aggressive traders can look to take short position in the Nifty 50 index if it falls below 16450 points while keeping the stop loss around 16750 points, said Yesha Shah, head of equity research, Samco Securities.
--Nifty 50 Mar ended at 16656.60, up 44.70 points; 26.15-point premium to spot index
--Nifty 50 Apr ended at 16700.00, up 45.50 points; 69.55-point premium to spot index
--Nifty 50 May ended at 16734.00, up 39.80 points; 103.55-point premium to spot index
The total turnover in the futures and options segment of the National Stock Exchange was 46.4 trln rupees compared with 224.7 trln rupees on Thursday.
The turnover in index options was 43.6 trln rupees against 221.1 trln rupees in the previous session. The total premium turnover of index and stock options was 453.3 bln rupees compared with 653.6 bln rupees on Thursday.
The most actively traded underlying stocks were Tata Motors, ICICI Bank, Tata Steel, HDFC Bank, Reliance Industries, Jindal Steel & Power, Axis Bank, Cipla, State Bank of India, ITC, and Infosys. End
Edited by Maheswaran Parameswaran
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