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Saturday, January 22, 2022

Equity Futures: Bearish bets in Mindtree as revenue fails to impress

Informist, Friday, Jan 14, 2022

 

By Ankika Biswas

 

MUMBAI – Profit booking saw Mindtree’s shares slump nearly 6% today as the information technology company’s Oct-Dec consolidated revenue missed the Street’s expectations. This slide in the cash market prompted traders to unwind their long positions in the out-of-the-money call options and add fresh short positions to the futures segment.

 

Prior to the earnings release, the stock had risen over 4% in the last three sessions in anticipation of strong results, and a lack of surprise on the revenue front triggered some profit booking today.

 

Consequently, bearish bets were seen in the futures segment as indicated by the over 8% rise in open interest of the January futures contract.

 

Meanwhile, on the options front, the premiums on the out-of-the-money 4,700-, 4,800- and 5,000-rupee strike prices call options saw a double-digit fall, as traders see limited scope of the stock testing those levels.

 

On the other hand, premiums on the out-of-the-money 4,200-, 4,300- and 4,400-rupee strike put options rose, in anticipation of the stock falling to these levels.

 

The scrip is likely to test a low of 4,400 rupees, breaching which it may fall further to 4,200 rupees, said a trading strategist, who anticipates some time-wise correction. Today, the stock closed over 4% lower at 4,547.95 rupees.

 

Bearish bets were also seen in the derivatives segment of Aurobindo Pharma today, as the stock ended nearly 5% lower in the cash market following the US Food and Drug Administration’s warning letter to the pharmaceutical company for a bulk drug manufacturing unit in Hyderabad.

 

The headline Nifty 50 closed a tad lower today amid lack of support from global markets and as investors waited for more clues on the earnings front. The gains in select information technology companies and Reliance Industries were outweighed by losses in some banks, automobile and consumer goods companies.

 

Analysts believe the index will remain within the range of 18000-18400 points in the upcoming earnings-heavy week, as it is likely to consolidate after sharp gains so far this year. Today, the index closed flat at 18255.75 points, after trading in the red for the majority of today’s session.

 

On the derivatives front, the 18200-strike price held the maximum open interest, suggesting the formation of an immediate support base at this level. However, action in the futures segment was pretty muted today.

 

-–Nifty 50 Jan ended at 18282.65, down 4.60 points; 26.90-point premium to spot index
-–Nifty 50 Feb ended at 18321.60, down 8.00 points; 65.85-point premium to spot index

-–Nifty 50 Mar ended at 18370.00, down 12.95 points; 114.25-point premium to spot index

 
The total turnover in the futures and options segment of the NSE was at 43.42 trln rupees compared to 152.6 trln rupees on Thursday.
 
The turnover in index options was 39.74 trln rupees, against 148.7 trln rupees the previous day. The total premium turnover of index and stock options was at 267.41 bln rupees compared to 313.1 bln rupees on Thursday.
 
The most actively traded underlying stocks included Infosys, HCL Technologies, Reliance Industries, HDFC Bank, Tata Consultancy Services, Tata Power, Axis Bank and ICICI Bank.  End

 

Edited by Michael Correya

 

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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