Informist, Wednesday, Aug 11, 2021

By Vivek Kumar

MUMBAI – On the penultimate day of the expiry of weekly index options, more action was witnessed in specific stocks in the derivatives segment today as investors factored in a slew of corporate earnings. 

Manappuram Finance, Siemens, Lupin, and a few other stocks were among the most actively traded in the derivates segment, on the back of their earnings. 

Shares of Manappuram Finance tanked 12.1% and closed at 168.25 rupees, while those of Lupin ended 6.2% lower at 1,050.75 rupees in the cash market following their disappointing Apr-Jun earnings. While Manappuram Finance hit a one-month low today, Lupin slipped to its three-month low. 

On the other hand, Siemens closed at 2,191.40 rupees, rising 6.4%. The scrip also hit its lifetime high of 2,218.1 rupees today.

Weakness in the shares of Manappuram Finance and Lupin may continue in the near term, while those of Siemens may see further upside, positioning in the options of the stocks showed. 

The premiums of 180 rupees and 170 rupees call option of Manappuram Finance slumped around 80% today, while among put options, premiums of 160 rupees and 150 rupees strike price surged 265% and 180%, respectively. Open interest in the August futures of the stock also surged 28%, indicating the addition of short positions.

Similarly, in Lupin also, the premiums of major call options fell and put options rose, confirming the investors' mood. The stock's futures contracts witnessed a build-up of short positions as open interest jumped 31%.

The movement in the derivatives segment indicated that weakness in both the stocks is likely to persist.
 

Expecting the weakness in both stocks to continue, Chandan Taparia, derivatives and technical analyst at Motilal Oswal Securities, said Manappuram Finance may fall to as low as 155 rupees, while support for Lupin is pegged at 1,000 rupees.

On the contrary, shares of Siemens are likely to continue their upward momentum as the stock's futures witnessed the addition of long positions. Premiums of 2,300 rupees and 2,240 rupees call option of the stock jumped over 100% today.

The stock closed at 2,191.40 rupees, rising 6.4%. The scrip also hit its life-time high of 2,218.1 rupees today.

Taparia believes the stock has the potential to move towards 2,350 rupees in the short term.

Meanwhile, the view for the benchmark Nifty 50 remains unchanged as the underperformance of banks is capping any upside for the index. 

The Nifty Bank has been moving in the range of 35500-36200 points for the last few sessions and a breakout on either side will determine the trend going ahead, said Hansraj Modi, head-technical and derivatives at BP Wealth Management.

The Nifty Bank index closed 0.6% lower at 35806.40 points today. The index hit a low of 35531.35 points and a high of 36227.55 points during the day.

Positioning in the options of the Nifty 50 showed that premiums of 16400 and 16300 points call option continued to fall today. Among put options, the highest addition of open interest was seen in the 16250 points and 16500 points strike price.

In the spot market, the index managed to close the volatile session flat at 16282.25 points. The index fell as much as 0.7% intraday before recovering the losses. The August futures of the index ended almost at par to the spot price.

Despite today's correction, analysts believe the overall outlook for Nifty 50 remains positive so long as it does not slip below 16100 points.

-–Nifty 50 Aug ended at 16281.60, up 4.65 points; 0.65-point discount to spot

-–Nifty 50 Sep ended at 16328.00, up 8.05 points; 45.75-point premium to spot

-–Nifty 50 Oct ended at 16350.95, up 3.90 points; 68.70-point premium to spot

Total turnover in the futures and options segment of the National Stock Exchange was higher at 63.8 trln rupees compared with 48.4 trln rupees on Tuesday.

Turnover in the index options was at 60.7 trln rupees compared with 45.2 trln rupees in the previous session. The total premium turnover of index and stock options was also higher at 228.6 bln rupees compared with 202.3 bln rupees on Tuesday.

Shares of Tata Steel, Vedanta, Reliance Industries, State Bank of India, Bharti Airtel, Jindal Steel, Lupin, ICICI Bank, Manappuram Finance, JSW Steel, Hindalco Industries, HDFC Bank, Infosys, Axis Bank, Adani Enterprises, Tata Motors, Kotak Mahindra Bank, Cadila Healthcare and Siemens were among the most actively traded.  End

Edited by Snigdha Kuttikat

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