Traders have built positions in futures and options contracts keeping in mind the impact of Covid-19 fears on businesses. Airline, automobile and multiplex stocks have seen the biggest jump in open interest in March futures on risk of business impact from the spread of the virus.
ET takes a look at 5 stocks which have seen the biggest jump in outstanding positions:
Bajaj Finance
CMP : Rs 4,279.90
OI change in March : 17.2%
Stock price chg in March : -9.95%
The downturn in the economy has left investors worried whether the company will be able to sustain its strong growth and asset quality, said analysts. The stock has fallen 5% in the last one month. However, consensus ratings remain in the stock’s favour. Bloomberg data shows that 20 of the 30 analysts tracking the stock have a buy rating on it.
PVR
CMP : Rs 1,672
OI change in March : 106.1%
Stock price chg in March : -15.7%
Multiplex stocks have been one of the hardest hit sectors due to fears of Covid-19 outbreak. Following reports of two fresh cases in India, market participants were concerned that it would result in lower footfalls as people avoid public places. On technical charts, the stock has fallen below its 50-day moving average. Chandan Taparia, derivatives analyst at Motilal Oswal said the stock has seen significant build-up of short positions and believes that the stock may fall to Rs 1,575-1,600.
InterGlobe Aviation
CMP : Rs 1,196.40
OI change in March : 51.4%
Stock price chg in March : -12.1%
Covid-19 impact is being felt in aviation stocks as well. While InterGlobe Aviation’s shares have fallen 15% in the last one month and are near 52-week low, shares of its peer
SpiceJet have already hit their lowest levels in a year. “The stock has fallen below the support of Rs 1,275 and is seeing negative price pattern on charts. The stock can go down to Rs 1,120- Rs 1,150 levels,” said Taparia of Motilal Oswal.
Bajaj Auto
CMP : Rs 2,706
OI change in March : 51.4%
Stock price chg in March : -12.1%
Besides sell-off in auto stocks recently in the weak market, Bajaj Auto’s shares have seen build-up of short positions also because of disappointing monthly sales. The company reported a 24% decline in its domestic sales in February, with 1.69 lakh units sold compared to 2.2 lakh units registered in February 2019. Total sales declined 9.9% to 3.54 lakh units. Technical analysts expect the stock to bounce back to Rs 2,900-levels.
Tata Motors
CMP : Rs 126.40
OI change in March : 14.3%
Stock price chg in March : -13.1%
Because of business exposure to Europe and China -- where Covid-19 has spread -- Tata Motors has seen build-up of bearish bets. The auto maker has reported a 34.4% cut in production at 37,826 units rolled out in February. Tata Motors’ passenger vehicles production stood at 13,321 units in the month of February, as against 19,590 units in February 2019, down 32%. Technical analysts said the stock looks weak on charts and it may fall to Rs 115.