Tuesday, Oct 22
By Apoorva Choubey
MUMBAI – Renewed uncertainty over Brexit and allegations of unethical practices at sector major Infosys prompted traders to take bearish bets in the October futures of most information technology companies.
Infosys shares fell 16% in the cash market due to whistleblower complaints alleging the company dressed up its books in “recent quarters” to boost short-term revenue and profits. Open interest in the October futures of the stock jumped 47%.
Uncertainty over the UK’s exit from the European Union resurfaced as Parliament did not pass Prime Minister Boris Johnson’s deal with the EU over the weekend. Johnson has introduced the Withdrawal Agreement Bill which is set to go to vote in Parliament later today.
Open interest in the October futures of Tata Consultancy Services, Tech Mahindra, Mindtree, Hexaware Technologies and HCL Technologies rose 2-5%, while these shares closed 0.2-3% lower in the cash market.
Tata Consultancy Services reportedly gets 16-28% revenues from Europe, while Wipro and Infosys earn 24.5% and 23.7%, respectively, dealers said. Tech Mahindra and HCL Technologies reportedly receive 29.8% and 10% of their revenues from the region.
Among others, the futures of Tata Motors and Bajaj Finance were sold, while those of ICICI Bank were bought. Action was seen in several mid-cap companies’ futures too due to a slew of corporate earnings.
Open interest in the October futures of the Nifty 50 rose 12.4% to 15.4 mln and the contract ended at a premium of 36.05 points to the spot index, provisional data showed.
The Nifty 50 closed at 11588.35, down 73.50 points or 0.6% from the previous close. The fall in shares of metal and information technology companies on account of fresh uncertainty over Brexit, and the sharp decline in shares of Infosys dragged down benchmark indices today.
–Nifty 50 Oct ended at 11624.40; down 45.60 points
–Nifty 50 Nov ended at 11667.65, down 45.40 points; 79.30-point premium to spot
–Nifty 50 Dec ended at 11715.00; down 46.75 points; 126.65-point premium to spot
The total turnover in the futures and options segment of the NSE rose to 10.2 trln rupees from 7.5 trln rupees on Friday.
In the index options segment, the turnover rose to 8.5 trln rupees from 6.1 trln rupees in the previous session. The total premium turnover of the index and stock options rose to 54.5 bln rupees from 48.3 bln rupees.
Futures and options contracts of Infosys, Reliance Industries, Bajaj Finance, ICICI Bank, HDFC Bank, Kotak Mahindra Bank, State Bank of India, Axis Bank, Housing Development Finance Corp, Tata Consultancy Services and Bharti Airtel were among the most actively traded. End
Edited by Shirsha Thakur
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