Axis Bank Sees Significant Open Interest Surge Amid Mixed Market Signals

Open Interest and Volume Dynamics

On 23 Jan 2026, Axis Bank's open interest (OI) in futures and options contracts rose sharply to 2,49,636 contracts from 2,13,752 the previous day, marking an increase of 35,884 contracts or 16.79%. This surge in OI was accompanied by a futures volume of 1,66,681 contracts, indicating robust trading activity. The combined futures and options value stood at approximately ₹51,84.24 crores, underscoring significant capital flow into the stock's derivatives market.

The underlying stock price closed at ₹1,268, hovering just 4.45% below its 52-week high of ₹1,327. However, the stock experienced an intraday low of ₹1,267, down 2.15% from the previous close, and underperformed its private sector banking peers by 1.7% on the day. This divergence between rising derivatives interest and a modest price decline suggests a nuanced market outlook.

Market Positioning and Directional Bets

The sharp increase in open interest typically signals fresh positions being taken by market participants. In Axis Bank's case, the rise in OI alongside a decline in spot price hints at a possible build-up of bearish bets or protective hedging strategies. Traders might be positioning for a near-term correction or volatility, despite the stock's strong technical backdrop, which includes trading above its 50-day, 100-day, and 200-day moving averages.

Interestingly, the stock is currently trading below its 5-day and 20-day moving averages, indicating short-term weakness. This technical setup, combined with falling investor participation—evidenced by a 1.15% decline in delivery volume to 42.14 lakh shares on 22 Jan—may be contributing to cautious sentiment among investors.

Mojo Score Upgrade Reflects Changing Sentiment

Axis Bank's MarketsMOJO score has improved to 58.0, upgrading its grade from Sell to Hold as of 15 Oct 2025. This reflects a more balanced outlook, with the bank's fundamentals and market positioning showing signs of stabilisation. Despite the upgrade, the Mojo Grade remains cautious, signalling that while the stock is no longer a sell, it does not yet command a strong buy recommendation.

The bank's large-cap status with a market capitalisation of ₹4,00,461 crores and a Market Cap Grade of 1 further supports its position as a key player in the private sector banking space. However, the recent 1.4% decline in the stock price on the day, compared to a 0.15% drop in the sector and 0.23% fall in the Sensex, indicates relative underperformance that investors should monitor closely.

Technical and Liquidity Considerations

From a technical perspective, Axis Bank's price action suggests a consolidation phase. The stock remains comfortably above its medium and long-term moving averages, which typically act as support levels. However, the dip below short-term averages and the intraday low near ₹1,267 raise caution flags for traders looking for momentum plays.

Liquidity remains adequate, with the stock's average traded value supporting trade sizes up to ₹16.07 crores based on 2% of the five-day average traded value. This ensures that institutional and retail investors can execute sizeable trades without significant market impact, an important factor for derivatives traders building or unwinding positions.

Implications for Investors and Traders

The surge in open interest combined with mixed price signals suggests that market participants are actively recalibrating their positions in Axis Bank. The increase in OI could be driven by fresh short positions anticipating a correction or by long holders hedging against volatility ahead of upcoming earnings or macroeconomic events.

Investors should weigh the improved fundamental outlook against the technical caution signals. The Hold rating from MarketsMOJO implies that Axis Bank is currently fairly valued, with limited upside in the near term but also reduced downside risk compared to previous months.

Outlook and Conclusion

Axis Bank's recent derivatives activity highlights a market in flux, with participants positioning for potential volatility despite a fundamentally sound backdrop. The 16.8% jump in open interest is a clear signal of increased engagement, but the mixed price action and falling delivery volumes suggest caution.

For investors, the current Hold rating and Mojo Score of 58.0 indicate that Axis Bank remains a core portfolio holding but may not offer immediate strong returns. Traders should monitor open interest trends closely, as sustained increases coupled with price declines could foreshadow further downside or heightened volatility.

Overall, Axis Bank's position near its 52-week high, combined with robust liquidity and improving fundamentals, supports a cautiously optimistic stance. However, the derivatives market activity underscores the importance of vigilance and active risk management in the weeks ahead.

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