Larsen & Toubro Gains 3.41%: 5 Key Factors Driving the Week’s Mixed Momentum

2 February: Robust Trading Activity and Mixed Options Positioning

On Monday, L&T’s stock price opened at Rs.3,830.70 and closed at Rs.3,922.00, down 0.29% from the previous Friday close of Rs.3,933.45. Despite the slight dip, the day was marked by significant trading volumes of 8,96,855 shares and a traded value of ₹350.86 crores, placing L&T among the most actively traded stocks by value. The stock outperformed the Sensex, which declined 1.03%, and the construction sector, signalling renewed investor interest.

Notably, the options market revealed contrasting sentiments. Call options at the ₹3,900 and ₹4,000 strikes saw heavy volumes and open interest, indicating bullish positioning ahead of the 24 February expiry. Simultaneously, put options at ₹3,800 and ₹3,900 strikes also recorded substantial activity, reflecting hedging or bearish bets. This duality suggests investors were actively managing risk amid expectations of near-term volatility.

Technically, the stock traded above its 5-day, 100-day, and 200-day moving averages but remained below the 20-day and 50-day averages, indicating short-term resistance. Delivery volumes rose 11.09% compared to the five-day average, underscoring growing investor conviction despite mixed signals.

3 February: Gap-Up Opening and Intraday High Near 52-Week Peak Amid Rating Downgrade

Tuesday saw a strong rebound as L&T opened sharply higher at Rs.4,080.00, a 3.36% gap up from Monday’s close, and reached an intraday high of Rs.4,119.95, just 1.9% below its 52-week high of Rs.4,194.70. The stock closed at Rs.4,037.65, up 2.95% on the day, outperforming the Sensex’s 2.63% gain and closely tracking the capital goods sector’s 3.71% advance.

This bullish price action was accompanied by robust trading volumes of over 10.65 lakh shares and a traded value exceeding ₹432 crores, reflecting strong institutional participation. Delivery volumes increased by 11.33% compared to the five-day average, signalling sustained investor interest.

However, MarketsMOJO downgraded L&T’s Mojo Grade from Buy to Hold on 2 February, citing valuation concerns and earnings pressures despite strong operational metrics. The Mojo Score settled at 68.0, reflecting a more cautious stance. The downgrade tempered enthusiasm but did not prevent the stock from maintaining its technical strength, trading above all major moving averages.

Put option activity remained elevated at the ₹3,900 and ₹4,000 strikes, indicating ongoing hedging or cautious positioning despite the rally. This mixed signals environment suggests investors were balancing optimism with risk management ahead of the February expiry.

4 February: Continued Gains Amid Sectoral Tailwinds

On Wednesday, L&T extended gains, closing at Rs.4,086.50, up 1.21% from the previous day. The stock outperformed the Sensex, which rose a modest 0.37%. The capital goods sector’s positive momentum supported L&T’s advance, with the stock trading above all key moving averages, reinforcing its technical uptrend.

Trading volumes moderated to 91,505 shares, but delivery volumes remained healthy, supporting the price strength. The stock’s proximity to its 52-week high continued to attract attention, although put option activity persisted, reflecting ongoing hedging strategies.

5 February: Minor Pullback and Declining Delivery Volumes

Thursday saw a slight correction as L&T closed at Rs.4,060.20, down 0.64%. The Sensex also declined 0.53%, indicating broader market weakness. Notably, delivery volumes dropped by over 50.5% compared to the five-day average, suggesting waning investor participation despite the stock’s technical strength.

Put option volumes remained significant, particularly at the ₹3,900 strike, signalling cautious sentiment ahead of the February expiry. The stock’s trading range narrowed, indicating consolidation near key support levels.

6 February: Consolidation and Heavy Put Option Activity Ahead of Expiry

Friday’s session closed the week with L&T at Rs.4,067.70, a marginal gain of 0.18%. The Sensex declined 0.41%, and the construction sector gained 0.05%, placing L&T’s relative performance in a cautious light. The stock traded in a narrow range, consolidating near its 52-week high.

Put option volumes surged again at the ₹3,900 strike, with 2,871 contracts traded and open interest exceeding 3,200 contracts. This activity suggests investors are increasingly seeking downside protection or speculating on a near-term correction. Delivery volumes remained subdued, down over 50% from the five-day average, indicating reduced conviction among buyers despite price resilience.

Technically, L&T remains above all major moving averages, signalling a bullish trend, but the heavy put option interest and declining delivery volumes highlight caution among market participants as the 24 February expiry approaches.

Key Takeaways

Larsen & Toubro’s 3.41% weekly gain notably outpaced the Sensex’s 1.51%, reflecting the stock’s relative strength amid a volatile market backdrop. The week was characterised by strong institutional participation, as evidenced by high traded volumes and rising delivery volumes early in the week, supporting the price rally.

The options market activity revealed a complex picture: heavy call option volumes indicated bullish expectations, while substantial put option interest suggested hedging and caution. This duality points to investor prudence as the February expiry approaches, balancing optimism with risk management.

The downgrade from Buy to Hold by MarketsMOJO on 2 February introduced a note of caution, driven by valuation concerns and EPS pressures despite solid operational metrics. Technical indicators remained largely positive, with the stock trading above all major moving averages, but short-term resistance near the 20-day and 50-day averages persisted.

Declining delivery volumes towards the week’s end and persistent put option activity highlight potential consolidation or a near-term correction risk. Investors should monitor price action around the ₹3,900 strike price, which has emerged as a key support level in the options market.

Conclusion

Larsen & Toubro Ltd. demonstrated resilience and relative outperformance during the week of 2–6 February 2026, supported by strong trading activity and a robust technical setup. However, mixed signals from the options market and a recent rating downgrade underscore the importance of cautious optimism. The stock’s proximity to its 52-week high and heavy put option interest suggest that investors are balancing growth prospects with prudent risk management ahead of the February expiry.

Going forward, sustained institutional buying and a break above short-term resistance levels will be critical for further gains. Meanwhile, monitoring delivery volumes and options open interest will provide valuable insights into evolving market sentiment around this large-cap construction leader.

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