INSUBCONTINENT EXCLUSIVE:
Traders are adding bearish positions in most of the stock futures as the market remains on the edge due to the coronavirus pandemic and the
impact of the shutdowns on the global economy
Stock futures which have seen highest surge in open interest have seen addition of short positions as their sectors are directly or
indirectly hit by the coronavirus outbreak, and the resultant halt in business activities
Stock futures of banks and non-banking financial companies have also seen open interest surging 17-33% due to addition of short positions on
fears of rise in bad loans due to the nation wide lockdown and moratorium for term loan borrowers announced by the Reserve Bank of India
ET takes a look at five stocks which have seen highest addition in open interest in the April series.
Jindal Steel - PowerCMP: Rs 70.25
OI
Change in April: 453.61%
Share price chg*: -20.93%
1-Mth share price chg: -54.19%
Steel companies have taken a hit due to weak demand
In a note on the metal and mining sector, Emkay Global said the nation wide lockdown may extend further if the government believes that
severity of the outbreak is much more than the current estimates, which would lead to a washout June quarter for most of the companies in
its coverage in the sector
Outlook for Jindal Steel also remains weak due to this
Chandan Taparia of Motilal Oswal expects the stock to fall by 12-14% in the near term to Rs 60-62 levels.
Kotak Mahindra BankCMP: Rs
1,181.65
OI Change in April: 33.35%
Share price chg*: -13.93%
1-Mth share price chg: -26.10%
Kotak Mahindra has seen addition of short
positions on weakness in the banking sector
Taparia of Motilal Oswal expects the stock to fall to Rs 1,000-1,050, and sees resistance at Rs 1,400
602.80
OI Change in April: 29.21%
Share price chg*: -6.25%
1-Mth share price chg: -18.66%
The market is pricing in the impact of coronavirus
pandemic on businesses of IT companies, which have considerable exposure to the US and Europe, where the virus cases are increasing
Analysts believe IT companies could feel the heat of pricing pressure, revenue loss due to lockdowns, cutback in IT spending and impact on
new client wins or large deal closures
Amit Gupta of ICICIdirect says the stock could see short covering if it tops Rs 640 level.
Maruti Suzuki IndiaCMP: Rs 4,246.35
OI Change in
April: 22.91%
Share price chg*: -12.95%
1-Mth share price chg: -32.44%
Traders have been building short positions in auto stocks, including
Maruti, on fears of sales disruption due to coronavirus outbreak and country wide lockdown
Ambit Capital assumes lockdown in key populated districts of India will persist till April-end to avoid spread of coronavirus, which could
significantly weaken car sales in the first half of the ongoing financial year
Maruti Suzuki India reported a 47% fall in March sales on Thursday
Gupta of ICICIdirect said the stock may see a reversal from Rs 3,500 level, which is a key support for the stock.
Bajaj FinanceCMP: Rs
2,219.35
OI Change in April: 12.62%
Share price chg*: -20.56%
1-Mth share price chg: -49.11%
Concern that coronavirus pandemic will hit
growth prospects of the NBFC sector has led to the stock futures of Bajaj Finance seeing significant addition of short positions
Shrivastawa of Sharekhan said Bajaj Finance has a high portion of consumer discretionary, unsecured and SME loans, and going forward, growth
could slow in each of these categories.
*In April Series