Informist, Wednesday, Jun 1, 2022

By Ankika Biswas

MUMBAI – Premiums across out-of-the-money put options of Bajaj Auto more than doubled today in anticipation of persistent selling pressure on the stock. A sharp decline in the company's exports in May, owing to shortage of semiconductor chips, pushed the scrip 4% lower and to the bottom of Nifty 50 stocks. 

Traders were highly active at 3,400- to 3,600-rupee strike prices, suggesting that the scrip may draw support at 3,600-mark.

Meanwhile, premiums on most out-of-the-money call options saw a double-digit fall.

A 19% rise in open interest of June futures contract also reflected an aggressive build-up of short positions.

Given the view for the stock is negative, analysts feel it can slip further towards 3,600 rupees. Suggesting to avoid the stock as of now, analysts advised investors to accumulate it around the support level, foreseeing some chances of recovery thereon.

Today, Bajaj Auto closed 4% lower at 3,720.10 rupees apiece on the National Stock Exchange.

Bearish bets were also seen in the derivatives segment of Bata India, which fell nearly 3% during the day after a large deal involving 3.6 mln shares took place on the BSE. The near-10% rise in open interest of the June futures contract indicated short formations.

While the fall was largely a knee-jerk reaction to the deal, analysts anticipate further downside towards 1,780-1,800 rupees, while advising to avoid the stock for now.

Today, it closed 1.3% lower at 1,852.30 rupees apiece on the National Stock Exchange.

Meanwhile, call option writers remained active in the market as the Nifty 50 closed in the red for yet another session, slipping below the key 16600-point mark. Premium across the 16600-17000 strike price call options saw a double-digit fall.

Analysts believe that a breach of its support level of 16500 points may see the index fall towards 16300 points. However, managing to sustain above 16600 points can trigger covering of short positions and push it higher to 16700-16800 points.

TOday, the Nifty 50 closed 0.4% lower at 16522.75 points, after slipping to a low of 16438.85 points intraday. Open interest in the June futures contract was up over 3%.

--Nifty 50 Jun closed at 16529.65, down 47.95 points; 6.90-point premium to spot index

--Nifty 50 Jul closed at 16553.95, down 39.60 points; 31.20-point premium to spot index

--Nifty 50 Aug closed at 16585.00, down 39.70 points; 62.25-point premium to spot index

The total turnover in the futures and options segment of the National Stock Exchange was 109.51 trln rupees, much higher than 82.50 trln rupees on Tuesday.

The turnover in index options was 107.23 trln rupees, compared with 79.68 trln rupees in the previous session. The total premium turnover of index and stock options was 420.38 bln rupees, higher than 399.77 bln rupees on Tuesday.

The most actively traded underlying stocks were Reliance Industries, HDFC Bank, Tata Steel, ICICI Bank, Mahindra & Mahindra, JSW Steel, Maruti Suzuki India, Kotak Mahindra Bank, Adani Enterprises and Titan Co. End

Edited by Deepshikha Bhardwaj

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