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Equity Futures:Positions show Muthoot Fin may see 7-8% more downside

Informist, Tuesday, Aug 16, 2022

 

By Vidya Sreedhar

 

MUMBAI – Disappointing quarterly earnings from Muthoot Finance pulled down its shares to an over one-month low today, which triggered bearish bets in the derivatives segment. 

 

The open interest in the August futures contract of the stock surged 52% to 7.9 mln due to a strong build up of short positions. Positioning in the options show the stock may fall another 7-8% as traders have heavily bought out-of-the-money put options of the stock. The premiums of 960 rupees strike price put option have surged manifold and that of 900 rupees nearly eight-fold. 

 

In the cash market, the stock ended more than 12% down at 1,040.10 rupees after testing a low of 1,009.30 rupees. 

 

Meanwhile, long positions were built in the August futures contract of Adani Ports and Special Economic Zone as the deal by arm Adani Logistics to acquire Navkar Corp’s freight operations in Valsad, Gujarat is likely to boost its logistics business and have pan-India presence. 

 

In the cash market, shares of Adani Ports hit an over three-month high of 826 rupees. It ended 4.5% higher at 824.15 rupees. 

 

Several frontline stocks and the Nifty 50, too, saw addition of long positions after it moved past the 17800-point mark and sustained above that level. The open interest in the August futures contract of Nifty 50 rose over 3% to 10.9 mln.

 

In the spot market, Nifty 50 ended at a four-month high of 17825.25 points, up 127.10 points or 0.7%. 

 

But some analysts recommend exercising caution as indicators show market is in an overbought zone.     

 

“The momentum readings are highly overbought and hence, the risk for forming fresh longs have increased significantly,” said Ruchit Jain, lead analyst at 5Paisa.com.

 

Nifty is a tad away from the resistance level of 17875 points, and Jain believes one should reduce long positions and take some money off the table. 

 

Meanwhile, the immediate support for Nifty 50 has now shifted higher to 17720 points, followed by 17600 points, Jain said. 

 

–Nifty 50 Aug closed at 17859.30, up 146.25 points; 34.05-point premium to spot index

–Nifty 50 Sep closed at 17931.05, up 148.90 points; 105.8-point premium to spot index

–Nifty 50 Oct closed at 17970.00, up 150.75 points; 144.75-point premium to spot index

 

The total turnover in the futures and options segment of the National Stock Exchange rose to 80 trln rupees today from 60.2 trln rupees on Friday.

 

The turnover in index options at 76 trln rupees, was higher than 56.3 trln rupees seen on Friday. The total premium turnover of the index and stock options was 303 bln rupees compared with 306 bln rupees in the previous session.  

 

Adani Enterprises, Reliance Industries, ICICI Bank, Maruti Suzuki India, Tata Motors, HDFC Asset Management Co, Ambuja Cements, HDFC Bank, Zee Entertainment Enterprises, Muthoot Finance, and Eicher Motors were the other 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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© Informist Media Pvt. Ltd. 2022. All rights reserved.

Source: Cogencis

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