Informist, Tuesday, Feb 6, 2024
By Anjana Therese Antony
MUMBAI – Traders added out-of-the-money call bets in Tata Consumer Products contracts ahead of its December quarter earnings on Wednesday. Premiums at and above 1,170-rupee strikes of the company's call options expiring on Feb 29 rose marginally, while those on puts at and below this strike declined. The stock today closed nearly 13 rupees higher at 1,163.55 rupees on the National Stock Exchange. Immediate support for the stock is pegged at 1,190 rupees and resistance is seen at 1,140 rupees, according to some technical analysts. In a broader range, support is expected at 1,200 rupees and hurdle at 1,100 rupees, one of the technical analysts said.
The fast-moving consumer goods company is expected to post a fall of 4% year-on-year in its consolidated net profit to 3.38 bln rupees for Oct-Dec, even as revenue is seen rising 8.7% from a year ago to 37.78 bln rupees, according to the average of estimates of eight broking houses. The year-on-year revenue growth would be aided by sales of branded tea and food products, while a high base is likely to hit the profit figure.
Coming back to the options chain, the premium on call contracts at 1,170 strike price rose nearly 7 rupees to 31.50 rupees. This strike price is hardly 7 rupees away from today's closing price of the stock. This level has the highest open interest addition of over 204,000 and second-highest open interest concentration of nearly 650,000. The premium on 1,200-rupee strike rose by over 4 rupees to 20 rupees and this strike has the highest concentration of open interest.
On the put side, premium on 1,700-rupee contracts fell over 6 rupees to 31.55 rupees and has the second-highest concentration of open interest. The broader support level of 1,100-rupee strike has the highest open interest addition as well as concentration.
The Indian stock market is likely to extend today's gains to the next session. The benchmark Nifty 50 index is expected to cross the new psychologically important level of 22000 points Wednesday. The immediate resistance for the 50-stock index is 22200 points, while support is pegged at 21800 points. In the near term, the index may test its all-time high of 22126.80 points, which it had hit Friday. Today, the Nifty 50 closed 157.70 points, or 0.7%, higher at 21929.40 points and the BSE Sensex ended 454.67 points, or 0.6%, higher at 72186.09 points.
Market participants will also focus on the monetary policy outcome of the Reserve Bank of India on Thursday. Though the apex bank is widely expected to keep key interest rates unchanged at 6.50% for the sixth straight time, the focus will be more on the policy committee's stance on 'withdrawal of accommodation'. "MPC (Monetary Policy Committee) will consider cutting rates in Q2FY25 (Jul-Sep) when headline inflation inches closer to the 4% mark," Care Ratings said in its report today.
--Nifty 50 Feb closed at 22000.80, up 197.35 points; 71.40-point premium to spot index
--Nifty 50 Mar closed at 22142.20, up 194.55 points; 212.80-point premium to spot index
--Nifty 50 Apr closed at 22278.00, up 188.60 points; 348.60-point premium to spot index
Indian Oil Corp, Ashok Leyland, State Bank of India, HDFC Bank, Tata Consultancy Services, Steel Authority of India, Oil and Natural Gas Corp, Bharat Petroleum Corp, and Tata Motors were the most actively traded underlying stocks today. End
Edited by Ashish Shirke
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