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Mint
14 minutes ago
- Mint
Stock market today: 125 stocks hit 52-week highs, 89 stocks at 52-week low as Nifty 50, Sensex end lower
Dhanya Nagasundaram Published 28 Jul 2025, 03:33 PM IST Mint Image Stock market today: 125 stocks hit 52-week highs, 89 stocks at 52-week low as Nifty 50, Sensex end lower
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Business Standard
14 minutes ago
- Business Standard
LIC inks $1 billion in bond derivatives as hedging gains traction
Life Insurance Corporation of India (LIC) has signed $1 billion worth of forward rate agreements (FRAs) with major Wall Street banks, marking a major push into bond derivatives. The move reflects the insurer's growing use of hedging tools as it looks to protect long-term returns amid rising market volatility and falling equity valuations. What's the latest According to a Bloomberg report, LIC has entered into FRA contracts with JPMorgan Chase & Co. and Bank of America Corp, locking in future bond yields to guard against declining interest rates. The $1 billion in FRA deals represents a sharp increase in LIC's derivatives activity, accounting for 38 per cent of the $2.6 billion cleared in India since May. Numbers game Share of total FRA trades since May: 38 per cent LIC asset base: $630 billion Loss in equity portfolio (Jun 30–Jul 25): ₹46,000 crore Portfolio value drop: ₹16.10 trillion → ₹15.64 trillion Equity portfolio value gain since Apr low: ₹1.94 trillion Nifty 50 index (Jul 25): 24,837 Sensex index (Jul 25): 81,463.09 What it means LIC's deepening foray into bond hedging marks a significant shift for India's largest institutional investor, indicating that even state-backed entities are now actively mitigating interest rate risk. As government bond auctions draw stronger demand and financial markets experience higher volatility, large investors like LIC are turning to derivatives to stabilise returns and manage risk exposures. This also points to increasing sophistication in India's financial risk management practices, especially among long-term asset holders. Backstory LIC began exploring bond derivatives in late 2024, initially executing small trades earlier this year. As market uncertainty grew, it gradually expanded its hedging strategy to include FRAs. Forward rate agreements allow the insurer to lock in interest rates for future bond purchases, with banks assuming the price risk. This hedging mechanism offers a buffer against rate cuts, which can reduce bond yields and impact LIC's long-term income streams. LIC equity portfolio losses At the same time, LIC has faced losses in its stock investments this month. As earlier reported by Business Standard, estimates show the market value of LIC's equity portfolio declined by ₹46,000 crore between June 30 and July 25, 2025, as benchmark indices Nifty 50 and BSE Sensex fell 2.6 per cent to 24,837 and 81,463.09, respectively. LIC's 322-stock portfolio declined from ₹16.10 trillion to ₹15.64 trillion over that period. Still, the portfolio is ₹1.94 trillion higher than it was in early April, when markets hit their lowest point in a year.
India Today
14 minutes ago
- India Today
Sensex ends 572 points lower, Nifty below 24,700; Kotak Bank down 7%
Sensex ends 572 points lower, Nifty below 24,700; Kotak Bank down 7%This is a developing story. It will be updated.- Ends
