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Equity Futures: Positioning shows good times for SBI Life to stay

Informist, Friday, Jul 29, 2022


By Vidya Sreedhar


MUMBAI – SBI Life Insurance Co was the star of the show today, as robust Apr-Jun earnings bolstered growth outlook for the company and triggered bullish bets. The stock hit a record high of 1,304.70 rupees in the cash market, and positioning in the derivatives segment indicates good times are here to stay. 


A significant build up of long positions lifted open interest in the August futures contract of SBI Life by nearly 17% to 7.1 mln. Among options, the 1,300 rupees strike price call option was the most actively traded and added more than 500,000 shares in open interest. 


Analysts see scope for the stock to test 1,400 rupees, and if it manages to decisively cross that level, then 1,500 rupees is the next target pegged by them. The stock ended nearly 9% higher at 1,294.40 rupees. 


The other stock that saw noteworthy action was Tata Steel. The 10-for-1 stock split boosted investor participation and saw the stock hitting an over one-month high of 109.30 rupees in the cash market.


The strong gains triggered bullish bets in the derivatives segment. The August futures contract of the stock saw open interest rising nearly 8% to 261 mln on the back of a build up of long positions. 


Deep out-of-the-money call options of the stock saw strong build up in open interest. The premiums across 110, 112, 114, 116, and 120 rupees strike prices more than doubled. In the cash market, the stock ended 7.2% higher at 107.60 rupees.


With respect to Nifty 50, the index held on to Thursday’s momentum and moved past the 17100-mark today for the first time since May. As the index sustained gains, traders further built long positions in the August futures contract of the index, resulting in an over 12% rise in open interest to 10.1 mln.


In the spot market, the Nifty 50 ended 1.4% higher at 17158.25 points. The index ended at its highest level since Apr 28. 


Positioning in the call options suggest the index may test 17300 points in the week ahead, but it will hinge upon how supportive global markets are and on the outcome of Reserve Bank of India’s monetary policy meeting.    


–Nifty 50 Aug closed at 17207.45, up 252.25 points; 49.2-point premium to spot index

–Nifty 50 Sep closed at 17267.00, up 266.95 points; 108.8-point premium to spot index

–Nifty 50 Oct closed at 17311.00, up 154.90 points; 152.8-point premium to spot index


The total turnover in the futures and options segment of the National Stock Exchange was 70.4 trln rupees today compared with 230 trln rupees Thursday. The high turnover on Thursday was because of the expiry of the July derivative series.   


The turnover in index options was 67 trln rupees compared with 225 trln rupees on Thursday. The total premium turnover of the index and stock options was 396 bln rupees compared with 456 bln rupees in the previous session.    


Reliance Industries, HDFC Bank, Sun Pharmaceutical Industries, Bajaj Finance, Housing Development Finance Corp, HDFC Bank, HDFC Life Insurance Co, Infosys, TVS Motor Co, and Maruti Suzuki India were among the most actively traded underlying stocks.  End


Edited by Michael Correya


For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.


Cogencis news is now Informist news. 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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