Equity Futures: JLR woes make traders bet on Tata Motors falling 6%

Friday, Jan 11


By Apoorva Choubey 


MUMBAI – Fall in retail sales of arm Jaguar Land Rover and drop in group global wholesale sales for December prompted traders to cover shorts in the 170-rupee put option of Tata Motors. This suggests that they see the possibility of the stock falling 6% to 170 rupees.


The 170-rupee put option, which holds the highest open interest among put options, saw a 54% rise in premium, accompanied by a fall in open interest. 


Traders sold call options of the stock across strikes, reflecting the bearish outlook for shares of Tata Motors. The highest number of open positions remains at the 190-rupee call option, which indicates that the level will act as a stiff resistance for the shares in the near term. 


A build-up of long positions was also seen in the January futures of Tata Motors with an 8% jump in open interest.


In the cash market, shares of the automaker dropped 3% to 180.30 rupees, as Jaguar Land Rover's December retail sales fell 6.4% on year to 52,160 units, owing to lower sales in China. Tata Motors' global wholesale sales in December fell 13.9% on year to 100,551 units. 


Among other stock futures, Tata Consultancy Services was aggressively sold after the company's Oct-Dec operating margins disappointed investors. 


IndusInd Bank continued to see short positions as analysts expect the company's profits to be hit due to higher provisioning for exposure to Infrastructure Leasing & Financial Services in the coming quarters. 


Traders covered the short positions in the 10500 strike price put option of the Nifty 50, but added positions in the 10000 strike price. This indicates that the support for the index is moving lower. 


Today, the Nifty 50 index ended at 10794.95, down 26.65 points or 0.3% from the previous close. 


Open interest in the January futures of the Nifty 50 fell 0.4% to 24.9 mln and the contract provisionally ended at a premium of 18.60 points to the spot index. 


— Nifty 50 Jan ended at 10813.55, down 44.20 points

— Nifty 50 Feb ended at 10845.00, down 42.30 points; 50.05-point premium to spot
— Nifty 50 Mar ended at 10876.10, down 43.50 points; 81.15-point premium to spot


The total turnover in the futures and options segment of the National Stock Exchange fell to 5.03 trln rupees from 16.6 trln rupees in the previous session.  

In the options segment, the turnover was 4.11 trln rupees, compared with 15.8 trln rupees in the previous session, while the total premium turnover of index and stock options was 26.44 bln rupees against 29.9 bln rupees in the previous session.

The January futures and options contracts of Tata Consultancy Services, Reliance Industries, Infosys, ICICI Bank, State Bank of India, Axis Bank, IndusInd Bank, ITC, Maruti Suzuki India, Tata Motors, YES Bank, Tata Steel, Housing Development Finance Corp and HDFC Bank were among the most actively traded.  End


Edited by Maheswaran Parameswaran


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