Informist, Thursday, Jan 5, 2023

By Vaibhavi

NEW DELHI – Short bets flooded the derivatives segment of Bajaj Finance and its holding company Bajaj Finserv today following a sharp sell-off in the counters in the cash market.

Shares of Bajaj Finance nosedived over 8% to hit their lowest level in nearly a year as growth in the company's assets under management in the December quarter was slower than expected. The weak sentiment from the disappointing business update spilled over to holding company Bajaj Finserv and pulled its shares down over 6% to an over five-month low.

The steep losses in the cash market were also accompanied by a surge in short positions in the January futures contract of the two stocks. While open interest for Bajaj Finance skyrocketed nearly 19%, that for Bajaj Finserv rose over 6%. These were also among the most actively traded contracts today.

The sharp rise in short positions reflected limited hopes of a near-term trend reversal in the stocks, analysts said. Jefferies India said slower-than-expected growth was likely to remain an overhang for Bajaj Finance in the near term.

Similar bearishness was seen in the positions taken by traders in the options segments of these counters. Intense buying across out-of-the-money put options was seen in both the counters, which sharply lifted premiums for those contracts.

For Bajaj Finance, traders were most active across the 6,000-5,500-rupee strike price put options as these contracts garnered the maximum addition of open interest. 

Bajaj Finance has broken out of the lower band of its recent consolidation phase and is now likely to extend its downfall to levels around 5,660 rupees in the days to come, said Rupak De, senior technical and derivatives analyst at LKP Securities.

As for Bajaj Finserv, the maximum addition of open interest was seen across 1,460-1,360-rupee strike price put options as traders expect the stock to correct to these levels in the near term. 

De also supports this view, as he pegged immediate support for the stock at 1,455 rupees, a fall below which could see the price move lower towards 1,360-1,330-rupees.

Forecasting more correction in these counters, De suggested that investors wait for a steeper fall to add fresh positions.

Today, shares of Bajaj Finance ended over 7% lower, while those of Bajaj Finserv closed with around 5% losses.

The Nifty 50 also slipped below the psychologically important 18000-mark, which led to a surge in bearish bets. Viraj Vyas, technical and derivatives analyst at Ashika Stock Broking, believes it will be much more crucial for the Nifty 50 to defend the 17800 level, which is a strong support for the index.

The index also appears to be in an oversold zone, which might trigger a pullback in the market. However, such pullbacks will be used to add short positions in the index until it decisively crosses 18350 points along with a strong price action, Vyas added.

Today, the Nifty 50 closed 0.3% lower at 17992.15 points.

--Nifty 50 Jan closed at 18070.05, down 33.00 points; 77.90-point premium to spot index

--Nifty 50 Feb closed at 18135.00, down 34.40 points; 142.85-point premium to spot index

--Nifty 50 Mar closed at 18209.00, down 43.20 points; 216.85-point premium to spot index

The total turnover in the futures and options segment of the NSE was 418.61 trln rupees, against 291.06 trln rupees on Wednesday. Volumes were sharply higher due to the expiry of the weekly options contracts today.

The turnover in index options was 415.68 trln rupees compared with 288.24 trln rupees in the previous session. The total premium turnover of index and stock options was 693.64 bln rupees compared with 690.87 bln rupees on Wednesday.

Bajaj Finance, Bajaj Finserv, Apollo Tyres, HDFC Bank, Axis Bank, ICICI Bank, Reliance Industries, Infosys, Adani Enterprises, and State Bank of India were among the most actively traded underlying stocks.  End

Edited by Avishek Dutta

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.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2023. All rights reserved.

Informist, Thursday, Jan 5, 2023

By Vaibhavi

NEW DELHI – Short bets flooded the derivatives segment of Bajaj Finance and its holding company Bajaj Finserv today following a sharp sell-off in the counters in the cash market.

Shares of Bajaj Finance nosedived over 8% to hit their lowest level in nearly a year as growth in the company's assets under management in the December quarter was slower than expected. The weak sentiment from the disappointing business update spilled over to holding company Bajaj Finserv and pulled its shares down over 6% to an over five-month low.

The steep losses in the cash market were also accompanied by a surge in short positions in the January futures contract of the two stocks. While open interest for Bajaj Finance skyrocketed nearly 19%, that for Bajaj Finserv rose over 6%. These were also among the most actively traded contracts today.

The sharp rise in short positions reflected limited hopes of a near-term trend reversal in the stocks, analysts said. Jefferies India said slower-than-expected growth was likely to remain an overhang for Bajaj Finance in the near term.

Similar bearishness was seen in the positions taken by traders in the options segments of these counters. Intense buying across out-of-the-money put options was seen in both the counters, which sharply lifted premiums for those contracts.

For Bajaj Finance, traders were most active across the 6,000-5,500-rupee strike price put options as these contracts garnered the maximum addition of open interest. 

Bajaj Finance has broken out of the lower band of its recent consolidation phase and is now likely to extend its downfall to levels around 5,660 rupees in the days to come, said Rupak De, senior technical and derivatives analyst at LKP Securities.

As for Bajaj Finserv, the maximum addition of open interest was seen across 1,460-1,360-rupee strike price put options as traders expect the stock to correct to these levels in the near term. 

De also supports this view, as he pegged immediate support for the stock at 1,455 rupees, a fall below which could see the price move lower towards 1,360-1,330-rupees.

Forecasting more correction in these counters, De suggested that investors wait for a steeper fall to add fresh positions.

Today, shares of Bajaj Finance ended over 7% lower, while those of Bajaj Finserv closed with around 5% losses.

The Nifty 50 also slipped below the psychologically important 18000-mark, which led to a surge in bearish bets. Viraj Vyas, technical and derivatives analyst at Ashika Stock Broking, believes it will be much more crucial for the Nifty 50 to defend the 17800 level, which is a strong support for the index.

The index also appears to be in an oversold zone, which might trigger a pullback in the market. However, such pullbacks will be used to add short positions in the index until it decisively crosses 18350 points along with a strong price action, Vyas added.

Today, the Nifty 50 closed 0.3% lower at 17992.15 points.

--Nifty 50 Jan closed at 18070.05, down 33.00 points; 77.90-point premium to spot index

--Nifty 50 Feb closed at 18135.00, down 34.40 points; 142.85-point premium to spot index

--Nifty 50 Mar closed at 18209.00, down 43.20 points; 216.85-point premium to spot index

The total turnover in the futures and options segment of the NSE was 418.61 trln rupees, against 291.06 trln rupees on Wednesday. Volumes were sharply higher due to the expiry of the weekly options contracts today.

The turnover in index options was 415.68 trln rupees compared with 288.24 trln rupees in the previous session. The total premium turnover of index and stock options was 693.64 bln rupees compared with 690.87 bln rupees on Wednesday.

Bajaj Finance, Bajaj Finserv, Apollo Tyres, HDFC Bank, Axis Bank, ICICI Bank, Reliance Industries, Infosys, Adani Enterprises, and State Bank of India were among the most actively traded underlying stocks.  End

Edited by Avishek Dutta

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.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2023. All rights reserved.