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Equity Futures: Robust earnings trigger bullish bets in ICICI Bank

Informist, Monday, Oct 25, 2021


By Joe Milton


MUMBAI – Shares of ICICI Bank surged today on the back of robust Jul-Sep earnings, which prompted traders to initiate long positions in the October futures of the stock. 


Open interest in the October futures of ICICI Bank soared 27% to 81.4 mln as traders placed their long bets in hopes that the stock would continue its bullish momentum. 


On the options front, traders continued to add positions in the 850-900 rupees out-of-the-money call options strike price. Maximum addition of open interest in the put option side was at the 800 rupees strike price, which is expected to be the immediate support level. 


Options data of ICICI Bank indicate that the stock may head towards 950 rupees in the coming sessions, analysts said. Today, shares of ICICI Bank closed about 11% higher at 841.70 rupees after touching its all-time high of 867 rupees. 


The strong earnings from ICICI Bank had a rub-off effect on Axis Bank, as traders initiated long positions in the October futures of the stock ahead of its Jul-Sep earnings on Tuesday. 


Open interest in the October futures of Axis Bank was up 3.5% at 28.8 mln, and analysts expect the stock to further move towards 900 rupees in the coming sessions. 


HDFC Bank and ICICI Bank have reported strong Jul-Sep numbers, and the expectation has been set on that front, said Parag Shah, senior technical analyst at Edelweiss Broking. Going forward, the analyst expects the bullish momentum in banking stocks to continue. 


On the fundamental side too, market experts believe the bank stocks provide a valuation comfort, which gives more room for an upside. 


Strong buying in frontline banks helped the Nifty Bank index scale its lifetime high of 41829.60 points, but it came off highs and closed at 41192.40 points, up 2.2%. 


Open interest in the October futures of Nifty Bank surged 14% to 1.6 mln, suggesting initiation of long positions by traders. The index is expected to continue its outperformance and head towards 42000 points, said ICICI Securities in its report.


Meanwhile, if the Nifty Bank index declines towards 39500 points, it should be considered a buying opportunity, the report added. 


Gains in financial stocks prevented a sharp decline in the headline indices as investors booked profits amid stretched valuations. Open interest in the October futures of Nifty 50 was marginally down as traders largely kept their positions unchanged. 


Today, the 50-stock index closed at 18125.40 points, down 0.1%, after touching an intraday low of 17968.50 points. Options data suggested that the index would take support at 18000 points, but on falling below this level, further selling pressure would take the index towards 17600 points. 


-–Nifty 50 Oct ended at 18153.90, up 9.35 points; 28.50-point premium to spot index

-–Nifty 50 Nov ended at 18195.00, up 5.90 points; 69.60-point premium to spot index

-–Nifty 50 Dec ended at 18279.80, up 5.70 points; 1454.40-point premium to spot index


Total turnover in the futures and options segment of the NSE was at 64.3 trln rupees today compared with 50.24 trln rupees on Friday.   

The turnover in index options was at 57.84 trln rupees compared to 44.38 trln rupees in the previous session. The total premium turnover of index and stock options was 364.7 bln rupees compared with 324.44 bln rupees on Friday.


ICICI Bank, Reliance Industries, Axis Bank, State Bank of India, Tata Steel, HDFC Bank, Bharti Airtel, Infosys, Tata Motors, Bajaj Finance, Vedanta Ltd, and Bank of Baroda were the other most actively traded underlyings today. End


Edited by Snigdha Kuttikat


Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.


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Source: Cogencis

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