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Informist, Tuesday, Oct. 22, 2024

By Anjana Therese Antony

MUMBAI – The options chain of Hindustan Unilever hinted that traders were indecisive about the stock's direction ahead of its September quarter results Wednesday. Traders have been placing short bets in HUL for more than a week and premiums across options declined marginally Tuesday, with the stock closing 0.4% lower at INR 2,681.70 on the National Stock Exchange.

Premiums on INR 2,680-2,800 call options of HUL expiring Oct. 31 declined 1-4% and those on INR 2,680-2,500 put contracts fell 2-4%. The highest open interest addition was at INR 2,800 call and INR 2,500 put options. The October futures contract of HUL also fell, mirroring the weakness in the cash market, and open interest rose 1.5% to 10.76 million.

For the September quarter, the fast-moving consumer goods player's consolidated net profit is seen largely unchanged on year at INR 27.08 billion and the revenue may rise 3.4% on year to INR 157.91 billion, as per the average of estimates from 15 brokerages. The muted earnings growth is expected amid rising raw material prices of palm oil and tea. 

Disappointment in financial growth of Indian companies and the consequent earnings downgrades have weighed on the overall sentiment of investors. These, along with persistent foreign outflows and expensive valuations, have kept the Indian equity market in the red for at least three consecutive weeks.  

On Tuesday, the Nifty 50 closed 1.3% lower at 24472.10 points and the BSE Sensex ended 1.2% lower at 80220.72 points. The Nifty 50 closed below the crucial 24500 mark for the first time in more than two months. The near-term support for the 50-stock index is pegged at 24300-24200 points and the resistance is seen at 25550-25700 points. 

Premiums on deep out-of-the-money call options expiring Thursday tumbled and those on put contracts more than doubled, hinting at the possibility of a further fall of the index. The highest open interest addition was seen at 24600-point call and 24400-point put options. Foreign institutional investors added over 2,300 short positions in index futures Monday and exited more than 3,300 long positions.

--Nifty 50 Oct closed at 24525.45, down 263.35 points; 53.35-point premium to spot index

--Nifty 50 Nov closed at 24670.60, down 254.10 points; 198.50-point premium to spot index

--Nifty 50 Dec closed at 24825.00, down 259.60 points; 352.90-point premium to spot index

HDFC Bank, ICICI Bank, Reliance Industries, State Bank of India, Kotak Mahindra Bank, Bajaj Finance, Kotak Mahindra Bank, City Union Bank, Axis Bank, Tata Motors, Adani Enterprises, Bajaj Auto, Hindustan Aeronautics, and UltraTech Cement were the most-actively traded contracts.  End

Edited by Tanima Banerjee

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