Equity Futures: Bullish bets in oil cos suggest more gains

Informist, Tuesday, Oct 5, 2021


By Joe Milton


MUMBAI – Long bets were witnessed in the derivative segment of upstream and downstream oil companies as the Brent crude touched its three-year-high of $81.48 a barrel, which would improve their profitability. 


Organization of the Petroleum Exporting Countries will raise production by only 400,000 barrels per day from November, which led to the spike in international crude oil prices. 

Following this, shares of Oil and Natural Gas Corp surged 11% and touched over two-year high of 164.60 rupees. As the crude prices are expected to remain elevated traders initiated long positions in the October futures of ONGC on expectation of more gains. Open interest in the contract surged over 30% to 64.1 mln. 


In the options segment of ONGC, call buyers were active across 165-175 rupees strike price as the premium across these strikes more than doubled. 


On the technical front, as the stock has given a breakout, it is expected to move further towards 175-180 rupees in the near term, said Ratnesh Goyal, senior technical and derivative analyst at Arihant Capital Markets. 


Apart from this, fresh long positions were added in the October futures of Reliance Industries as the open interest in the contract gained 5% to 29.3 mln. 


In the spot market, the stock gained 2.2% and touched its all-time high of 2,612 rupees, and analyst expect the stock to continue the momentum and touch 2,650 rupees in the near-term.


Bullish bets were seen in oil marketing companies too as open interest in October futures of Bharat Petroleum Corp, Hindustan Petroleum Corp, and Indian Oil Corp, rose 1-8%. 


Among the above-mentioned companies, Hindustan Petroleum Corp shows potential to further move towards 330 rupees, said Goyal. Today, the stock gained nearly 4% and closed at 314.45 rupees. 


Besides oil companies, renewed buying interest in information technology and bank stocks pushed the Nifty 50 index to end higher bucking the trend among its Asian peers. 


However, options data of Nifty 50 suggest that the index may face hurdle at 17900 and 18000 points. In September, the headline index surpassed 17900 points thrice, but has never above this level. 


Today, long positions were added in the October futures of the Nifty 50 as open interest rose 2% to 12.4 mln. Today, the index gained 0.7% and closed at 17822.30 points.


-–Nifty 50 Oct ended at 17837.05, up 130.80 points; 14.75-point premium to spot index

-–Nifty 50 Nov ended at 17862.00, up 119.10 points; 39.70-point premium to spot index

-–Nifty 50 Dec ended at 17899.75, up 122.90 points; 77.45-point premium to spot index


Total turnover in the futures and options segment of NSE was 44.45 trln rupees today compared with 37 trln rupees on Monday.  


The turnover in index options was about 41.21 trln rupees compared with 34 trln rupees in the previous session. The total premium turnover of index and stock options was 226.9 bln rupees compared with 221.7 bln rupees on Monday. 


Tata Power, Reliance Industries, Bharti Airtel, Indian Railway Catering and Tourism Corp, Tata Motors, Oil and Natural Gas Corp, Infosys, Tata Consultancy Services, Deepak Nitrite, and Tata Steel were the other most actively traded stocks today. End


Edited by Arshad Hussain


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