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Informist, Thursday, Jul 25, 2024

By Anjana Therese Antony

MUMBAI – Ahead of IndusInd Bank's earnings on Friday, traders wrote call options and sold puts of the private bank today. Premiums on out-of-the-money calls of the bank expiring on Aug 29 declined, while those on put options rose. In the spot market, the stock closed 1.3% lower at 1,379.10 rupees on the National Stock Exchange.

The bank is likely to report a near 10% on-year growth in net profit for the June quarter to 23.3 bln rupees, aided by a 15% rise in net interest income to 55.95 bln rupees, as per the average of estimates of 11 broking firms. "We expect provisions (of the bank) to increase due to higher slippages from the MFI (microfinance) portfolio but trends appear to be less worrisome as compared to other players. We are building slippages of around 2% (17 bln rupees)," Kotak Institutional Equities said in its earnings preview report.

In the stock's options chain, premiums on call options of 1,400-1,640 rupees fell 17-26%, while those on 1,400-1,200 rupees rose 26-39%. The 1,400-rupee strike put as well as call have the highest open interest addition. The August contract of the stock closed at an over 6-rupee premium to the spot price. The contract closed 1.4% lower and open interest rose 32% to 28.67 mln.

Today, the benchmark indices closed slightly lower as investors continued to book profits following the Union Budget on Tuesday. The Nifty 50 closed 7.4 points lower at 24406.10 points and the BSE Sensex ended down 109.08 points or 0.1% at 80039.80 points. The near-term support for the Nifty 50 is seen in the range of 24300-24200 points and resistance at 24500 points. Traders are indecisive about the market's direction on Friday. They expect the market to recover in the near term.

Premiums on Nifty 50 calls of 24400-25500 strikes expiring on Aug 1 declined 13-53% and those on 24400-23500 strikes fell 6-22%. The maximum open interest addition is at 25500-point call and 23000-point put. The August contract of the Nifty 50 closed at an over 55-point premium to the spot market and open interest rose 55% to 13.02 mln.

Bearish positions of foreign investors increased in index futures to 31% on Wednesday from 23% before the Budget announcement. They exited nearly 3,000 long positions and added more than 40,000 shorts in index futures. Analysts said the negative impact of the Budget is now fading, and the focus is turning back to the June quarter earnings, which is expected to set the market's tone in the short term. 

--Nifty 50 Jul closed at 24408.00, up 19.25 points; 1.90-point premium to spot index

--Nifty 50 Aug closed at 24461.55, down 30.65 points; 55.45-point premium to spot index

--Nifty 50 Sep closed at 24585.00, down 46.55 points; 178.90-point premium to spot index

HDFC Bank, Tata Motors, ICICI Bank, Axis Bank, State Bank of India, Reliance Industries, Bajaj Finance, ITC, Larsen & Toubro, Kotak Mahindra Bank, Hindustan Aeronautics, Vedanta, Canara Bank, and Adani Enterprises were among the most actively traded underlying contracts.  End

Edited by Ashish Shirke

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