The correct answer is C. is watching.
The sentence “He usually listens to the radio but at the present moment he is watching television” is in the present continuous tense. This tense is used to talk about actions that are happening at the moment of speaking. In this case, the speaker is saying that the man is currently watching television.
The other options are incorrect because they do not agree with the tense of the sentence. Option A, has watching, is in the past participle tense. This tense is used to talk about actions that have been completed. Option B, shall be watching, is in the future tense. This tense is used to talk about actions that will happen in the future. Option D, watches, is in the simple present tense. This tense is used to talk about actions that happen regularly or habitually.
In conclusion, the correct answer is C. is watching.