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Saturday, December 3, 2022

Equity Futures: Long bets in M&M Financial spurt as PAT tops view

Informist, Thursday, Nov 3, 2022


By Vaibhavi


NEW DELHI – Traders aggressively took fresh long positions in the futures of Mahindra & Mahindra Financial Services, as they expect the stock to rise further going ahead.


The non-banking finance lender snapped a four-day losing streak and surged nearly 15% in the cash market today as the company’s net profit for the September quarter topped market expectations.


Buoyed by the positive earnings, traders took fresh long positions in the November futures contract of M&M Financial, which lifted the open interest up by over 14%.


A similar bullish trend was seen in the options segment of the stock. Heavy buying across higher strike price out-of-the-money call options of 220-250-rupee lifted premiums across those contracts manifolds.


This suggests that traders expect the stock to test those levels in the near term.


Going by the strong bullish action in the derivatives segment, follow-up buying is likely to lift the stock even higher in the sessions to come, said Nirav Harish Chheda, technical and derivatives analyst at Nirmal Bang Institutional Equities.


Foreseeing strong returns in the near term, Chheda recommends that investors go long on the stock at current levels or buy on intraday declines towards 212 rupees.


Downside for the stock seems limited as there is strong support at around 212 rupees, analysts said.


The put options of 210- and 215-rupee strike prices also held sizeable open interest.


The scrip today ended 13.6% higher at 219.90 points.


As for the Nifty 50, hawkish comments by US Federal Reserve Chairman Jerome Powell dented sentiment and kept trade subdued.


The index moved in a narrow range throughout the session, but managed to stay above 18000 points, a key support, for much of the session.


Going ahead, analysts expect the Nifty 50 to face an immediate hurdle around 18100-18150 points. The call option of 18100 strike price expiring Thursday also holds the highest open interest, which backs this view.


In view of the positions in derivatives, only a fresh follow through move above 18100-18150 points is likely to drive the index higher, said Viraj Vyas, technical and derivatives analyst at Ashika Institutional Equities.


If it fails to surpass that level, we can expect more profit booking in the Nifty 50 towards 17800 points, Vyas said.


Today, the Nifty 50 ended 0.2% lower at 18052.70 points.


–Nifty 50 Nov closed at 18117.00, down 29.75 points; 64.30-point premium to spot index

–Nifty 50 Dec closed at 18185.00, down 25.85 points; 132.30-point premium to spot index

–Nifty 50 Jan closed at 18244.00, down 24.30 points; 191.30-point premium to spot index


Mahindra & Mahindra Financial Services, SRF, Housing Development Finance Corp, State Bank of India, Maruti Suzuki India, Adani Enterprises, Axis Bank, HDFC Bank, ICICI Bank, and Reliance Industries were among the most actively traded underlying stocks.


Volume for today’s derivatives trade was not updated on NSE’s website at the time of writing this story.  End


Edited by Ashish Shirke


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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