Stocks with huge surge in open interest: Look who's buzzing on a choppy road

The sentiment on Dalal Street has been subdued in recent days but there are some counters which are seeing heightened activity in their stock futures in the January derivatives series so far. Housing finance companies are drawing significant interest as their margins are likely to take a hit in the lending rate cut war with banks. ET takes a look at five such stocks and their outlook:

LIC HOUSING FINANCE
Traders have built short positions in LIC Housing as lending rate cut by leading banks is expected to hurt margins of housing finance firms. “Shorts have been built because of the news flow on MCLR cuts by banks. We have not seen any short covering move yet. It is likely to fall to sub-Rs 500 levels, to Rs 490,” said Navneet Daga, head of derivatives at IIFL Private Wealth.



INDRAPRASTHA GAS
Traders are taking bullish bets in the stock as the co is expected to benefit from likely shift to gas powered transportation in light of increasing focus towards curbing pollution. “Shares may see a minor fall given the subdued market sentiment but I expect them to recover and head to Rs 980 in the near term,” said Chandan Taparia, derivative analyst at Anand Rathi.



HOUSING DEVELOPMENT FINANCE CORPORATION
HDFC is also seen under pressure because of MCLR cuts. Macquarie said the stock could de-rate in the near term due to increased competitive intensity in the mortgage segment. On technical charts, it has strong support at Rs 1,180-1,190, from which it has rebounded multiple times in the past, Navneet Daga of IIFL said. However, any material upside is also unlikely, he said.



INDIAN OIL CORPORATION
Derivative analysts said IOC’s January futures have seen addition of long positions after it gave a breakout above its previous high of Rs 330. On Wednesday, it’s shares hit a 52-week high of Rs 352. Analysts see the stock rising to Rs 370 in the current series. IOC is set to benefit from inventory gains due to rising oil prices in the December quarter



DIVI’S LABORATORIES
The stock has seen continued build up of short positions in the January series on persistent negative sentiment after the US drug regulator found serious deviation from good manufacturing practices. The stock has plunged 34% since December. IndiaNivesh Securities lowered target price on the stock to Rs 1,087 from Rs 1,267 in a recent note.