More Stories

Informist, Tuesday, Jul 23, 2024

By Anjana Therese Antony

MUMBAI – The options chain of Larsen & Toubro Ltd hinted that the stock may remain lower ahead of a likely-subdued earnings for the June quarter, due on Wednesday. Traders bought deep out-of-the-money puts and sold calls, hinting at the bearishness. Today, the stock closed 3% lower at 3,538.05 rupees on the National Stock Exchange. 

The engineering and construction company is expected to post a nearly 13% on-year growth in its consolidated net profit to 28.14 bln rupees and nearly 8% rise in revenue to 515.47 bln rupees, according to the average of estimates of six broking firms. 

Broking firms consider L&T to be an outlier in the capital goods sector in terms of its expected weak performance for the quarter. Excluding L&T, Motilal Oswal Financial Services sees the capital goods companies under its coverage posting a 44% jump in aggregate net profit.

In the stock's options chain, premiums for calls in the range of 3,500-4,020 rupees declined 54-60%, while those for 3,520-3,220 strikes of put rose 113-172%. The 3,600-rupee call as well as put has the highest open interest concentration. The maximum open interest addition is at 3,700-rupee call and 3,400-rupee put. 

The Indian equity market is likely to move sideways after being volatile today during the presentation of the Union Budget. While analysts say there could be a slight correction in the next session, major movements are not anticipated. Investors' focus is likely to turn back to the June quarter corporate earnings, which is slowly gaining traction. Market participants will look for management comments on business outlook and demand trends to assess what lies ahead of these companies in the coming quarters.

After falling over 1% during the day, the benchmark Nifty 50 and BSE Sensex closed 0.1% lower each at 24479.05 points and 80429.04 points, respectively. The support for the 50-stock index is pegged at 24300 points for the near term and resistance is seen at 24600-24700 points. The fall in the fear gauge, India VIX, also indicate that the nervousness in the market has eased. The volatility index closed over 17% lower after ending higher in the last five straight sessions. 

Premiums across calls and puts of the Nifty 50 declined, hinting at the muted movements in the market. Premiums of 24400-23300 puts expiring Thursday declined 45-85% and those for 24500-25000 calls fell 57-85%. The July series of the Nifty 50 closed at a discount for the third consecutive session and closed 0.2% lower at 24452.95 points. Open interest declined 5.4% to 12.54 mln. 

--Nifty 50 Jul closed at 24452.95, down 56.15 points; 26.10-point discount to spot index

--Nifty 50 Aug closed at 24567.50, down 60.20 points; 88.45-point premium to spot index

--Nifty 50 Sep closed at 24701.00, down 57.95 points; 221.95-point premium to spot index

HDFC Bank, Vedanta, ICICI Bank, State Bank of India, Infosys, Larsen & Toubro, Titan Co, Axis Bank, Reliance Industries, ITC, REC, Bharat Electronics, Bajaj Finance, and Tata COnsultancy Services were among the most actively traded underlying contracts.  End

Edited by Akul Nishant Akhoury

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. 2024. All rights reserved.