Hindustan Zinc Ltd Sees Sharp Open Interest Surge Amidst Sustained Price Gains

Open Interest and Volume Dynamics

On 25 Feb 2026, Hindustan Zinc’s open interest in futures and options contracts rose sharply by 7,827 contracts, a 15.11% increase from the previous day’s 51,814 contracts to 59,641. This notable expansion in OI was accompanied by a robust trading volume of 55,736 contracts, underscoring strong participation from derivatives traders. The futures segment alone accounted for a value of approximately ₹47,655.44 lakhs, while the options segment’s notional value was substantially higher at ₹3,803.75 crores, indicating active hedging and speculative interest.

The total traded value in derivatives stood at ₹58,353.22 lakhs, reflecting ample liquidity and investor confidence in the stock’s near-term prospects. The underlying stock price closed at ₹615, having touched an intraday high of ₹621.3, a 4.01% rise, further validating the bullish momentum.

Price Performance and Moving Averages

Hindustan Zinc has been on a consistent upward trajectory, gaining 5.32% over the last four consecutive trading sessions. The stock outperformed the Metal - Non Ferrous sector, which itself gained 2.39% on the day, and the broader Sensex, which rose by a modest 0.38%. Notably, the stock’s price currently trades above its 5-day, 100-day, and 200-day moving averages, signalling a strong short- and long-term uptrend. However, it remains slightly below the 20-day and 50-day moving averages, suggesting some near-term resistance levels that traders will be watching closely.

Market Positioning and Investor Behaviour

The surge in open interest alongside rising prices typically indicates fresh buying interest and the initiation of new long positions by market participants. This is corroborated by the stock’s outperformance relative to its sector and the broader market. However, delivery volumes have declined by 23.06% compared to the 5-day average, with only 16.78 lakh shares delivered on 24 Feb 2026. This drop in delivery volume suggests that while speculative activity in derivatives is increasing, actual investor participation in the cash segment is somewhat subdued, possibly reflecting short-term trading strategies rather than long-term accumulation.

Liquidity remains healthy, with the stock supporting trade sizes of up to ₹6.97 crores based on 2% of the 5-day average traded value, making it accessible for institutional and retail traders alike.

Mojo Score and Analyst Ratings

Hindustan Zinc currently holds a Mojo Score of 64.0, categorised as a 'Hold' rating by MarketsMOJO, reflecting a cautious stance despite recent gains. This represents a downgrade from a previous 'Buy' rating issued on 13 Feb 2026, signalling that while the stock shows promise, certain valuation or market risks temper enthusiasm. The company’s market capitalisation stands at a substantial ₹2,56,878 crores, placing it firmly in the large-cap segment within the non-ferrous metals industry.

Sectoral Context and Broader Market Trends

The non-ferrous metals sector has been buoyant, with the Metal - Non Ferrous index rising 2.39% on the day, supported by robust demand forecasts and improving global commodity prices. Hindustan Zinc’s outperformance relative to its sector peers suggests it is benefiting from both company-specific factors and favourable macroeconomic conditions. However, the stock’s recent price action and open interest surge also imply that traders are positioning for potential further upside, possibly anticipating positive quarterly results or favourable policy developments.

Potential Directional Bets and Risks

The sharp increase in open interest combined with rising prices typically indicates a bullish directional bet by market participants. Traders appear to be initiating fresh long positions in futures and call options, expecting the stock to continue its upward momentum. However, the divergence between derivatives activity and declining delivery volumes warrants caution, as it may reflect speculative positioning rather than broad-based investor conviction.

Moreover, the stock’s current trading below the 20-day and 50-day moving averages suggests that near-term resistance levels could cap gains, and any adverse news or sectoral weakness could trigger profit-taking. Investors should also monitor global metal price trends and domestic regulatory developments, which remain key drivers for Hindustan Zinc’s performance.

Conclusion: Balanced Outlook for Investors

Hindustan Zinc Ltd’s recent surge in open interest and strong price performance highlight renewed investor interest and positive market sentiment. The stock’s ability to outperform its sector and maintain gains above key moving averages supports a cautiously optimistic outlook. However, the downgrade to a 'Hold' rating and the divergence between derivatives activity and delivery volumes suggest that investors should remain vigilant and consider risk management strategies.

For those looking to capitalise on the current momentum, monitoring open interest trends, volume patterns, and sectoral developments will be crucial in assessing the sustainability of this rally. Given the company’s large-cap status and fundamental strength, Hindustan Zinc remains a key stock to watch within the non-ferrous metals space.

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