Asian Paints Ltd Sees Significant Open Interest Surge Amid Mixed Market Signals

Open Interest and Volume Dynamics

On 23 February 2026, Asian Paints Ltd. (symbol: ASIANPAINT) recorded an open interest (OI) of 1,09,483 contracts in its derivatives, up from 97,498 contracts the previous session. This represents an absolute increase of 11,985 contracts or 12.29%, a substantial rise that indicates fresh positions being established or existing ones being rolled over. Concurrently, the volume stood at 47,517 contracts, reflecting active trading interest in the stock’s futures and options.

The futures segment alone accounted for a value of approximately ₹1,26,937 lakhs, while the options segment’s notional value was significantly larger at ₹16,462.25 crores. The combined derivatives turnover thus underscores the stock’s liquidity and the market’s focus on Asian Paints as a key sector player.

Price Performance and Moving Averages

Asian Paints’ underlying price closed at ₹2,437, showing a modest 0.25% gain on the day. This performance was broadly in line with the paints sector’s 0.37% rise but slightly lagged behind the Sensex’s 0.40% advance. The stock has been on a two-day consecutive gain streak, delivering a cumulative return of 1.39% over this period.

Technically, the price is trading above its 5-day moving average but remains below the 20-day, 50-day, 100-day, and 200-day moving averages. This mixed technical picture suggests short-term strength but longer-term resistance levels remain intact, potentially limiting immediate upside momentum.

Investor Participation and Liquidity Considerations

Despite the open interest surge, investor participation appears to be waning. Delivery volume on 20 February was 4.54 lakh shares, down 15.74% compared to the 5-day average delivery volume. This decline in physical shareholding transfer may indicate that the recent derivatives activity is driven more by speculative or hedging strategies rather than outright accumulation.

Liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹4.24 crores comfortably. This ensures that institutional and retail investors can execute sizeable trades without significant market impact.

Market Positioning and Directional Bets

The sharp rise in open interest, coupled with steady volume, suggests that market participants are actively repositioning themselves ahead of potential catalysts. The increase in OI by nearly 12.3% is significant in the context of the stock’s recent price consolidation and technical setup.

Given the stock’s current trading below key longer-term moving averages, the surge in derivatives activity may reflect a mix of bullish and bearish bets. Some traders could be initiating fresh long positions anticipating a breakout, while others might be hedging or speculating on a pullback, especially considering the subdued investor participation in the cash segment.

Options data, with a notional value exceeding ₹16,462 crores, further supports the view that Asian Paints is a focal point for complex strategies, including spreads and straddles, which often indicate uncertainty or preparation for volatility.

Mojo Score and Analyst Ratings

Asian Paints currently holds a Mojo Score of 51.0, reflecting a Hold rating. This marks a downgrade from a previous Buy rating as of 16 January 2026, signalling a more cautious stance by analysts. The Market Cap Grade remains at 1, consistent with its large-cap status and ₹2,33,373 crore market capitalisation.

The downgrade aligns with the mixed technical signals and the recent decline in delivery volumes, suggesting that while the company’s fundamentals remain solid, near-term price appreciation may be limited without a clear catalyst.

Sector and Broader Market Context

The paints sector has shown resilience, with a 1-day return of 0.37%, slightly outperforming Asian Paints’ 0.25% gain. The broader Sensex index advanced 0.40%, indicating a generally positive market environment. However, Asian Paints’ relative underperformance and the divergence between derivatives activity and cash market participation highlight a nuanced market sentiment.

Investors should monitor upcoming quarterly results, macroeconomic indicators such as raw material costs, and sectoral demand trends, which could influence the stock’s trajectory and validate the current positioning in derivatives.

Investor Takeaway

For investors and traders, the recent surge in open interest in Asian Paints’ derivatives signals an important shift in market positioning. While the stock’s price gains have been modest, the increase in OI and volume suggests that participants are preparing for potential volatility or directional moves.

Given the Hold rating and the downgrade from Buy, a cautious approach is advisable. Investors should watch for confirmation of trend direction through price action relative to key moving averages and monitor delivery volumes for signs of genuine accumulation.

Those with a higher risk appetite may consider derivative strategies to capitalise on expected volatility, but should remain mindful of the mixed signals and sector dynamics.

Conclusion

Asian Paints Ltd.’s recent open interest surge in the derivatives market highlights a complex interplay of bullish and bearish sentiment. The stock’s technical setup, combined with declining delivery volumes and a cautious analyst stance, suggests that while opportunities exist, investors should remain vigilant and selective in their approach.

Continued monitoring of volume patterns, price movements, and sector trends will be essential to gauge the sustainability of current positioning and to identify the optimal entry or exit points.

Only Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Start Today