Bets pay off
It seems a number of high networth individuals (HNIs) had bought put options ahead of the US election results to hedge the possibility of a steep fall in case of a Donald Trump victory. Put buying was seen at strike prices of 8,200 and 8,000 while major call writing was seen at 8,500 and 8,600 strike prices, say brokers. Following the election outcome, benchmark indices fell six per cent before trimming losses on Wednesday. The markets once again saw a sharp three per cent drop on Friday, causing a sharp increase in prices of Nifty put options. “The index might find some stability near to 8,200 levels but it is missing follow-up buying at higher levels a cause of concern for bulls,” said an expert.
Ashley Coutinho
IT may come back on fund managers’ radar
Domestic fund managers have been bearish on the information technology (IT) sector since the past one year due to its deteriorating outlook. Their stance has been proved right, as the BSE IT index has underperformed the benchmark Sensex by nearly 20 per cent this year. The steep correction in IT stocks has particularly deepened since July. However, the sharp drop has put these stocks back on fund manager’s radar. “We would be big buyers in Infosys and TCS if they correct another three-five per cent from current levels. The correction has made these counters attractive,” said a fund manager.
Chandan Kishore Kant
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‘Securities’ to be dropped from ‘goods’ definition in GST model
The advent of a goods and services tax (GST) would not result in any changes in the tax structure in the securities market. There were concerns that the structure would get altered as the definition of goods in the proposed GST model includes ‘securities’. Sources say the government plans to drop ‘securities’ from the definition and a clarification in this regard could be issued soon. Under the indirect tax legislation, securities are considered as activity of sale and purchase and haven’t been subjected to any service tax and value-added tax. Currently, share transactions attract securities transaction tax (STT), Krishi Kalyan cess and Swachh Bharat cess, apart from exchange and Sebi levies.
Shrimi Choudhary