The Hindu Business Line : IT counters at receiving end

DESPITE the market taking a sudden beating during the latter part of the day, trading activity picked up the derivative segment on the NSE on Tuesday.

The NSE recorded a higher turnover of Rs 15,135 crore as against Monday's Rs 15,104 crore, and just a notch away from its all-time figure of Rs 15,656 crore, which was recorded on December 30.

The cumulative FII positions, as percentage of total gross market position in the derivative segment on January 5 was 18.97 per cent.

The Nifty was volatile by touching a high of 1979.05, a low of 1908.75 and closed at 1926.70, a drop of 1.45 per cent from Monday's close. The Nifty January futures closed at 1922.95 against the previous day's close of 1957.15; open interest positions improved by two per cent to 42,726 contracts.

The February Nifty contracts closed at 1923.40 (1958.10) with open interest positions improving by two per cent to 733 contracts.

The unmatched order book on the NSE though suggests bullish undertone as the buy side calls were still higher than sell side, the just two per cent addition in open positions (as against strong build-up till recently), suggests players are turning bit cautious.

The implied volatility (IV) levels on Nifty puts increased to 25.63 per cent from Friday's figure of about 21 per cent; the IV on calls also improved to 23.48 per cent (21.95 per cent). Reversal of the volatility trend continues with further strengthening on the put side indicates markets to trade more volatile and weak.

Reliance, SBI, GAIL (India), Tata Steel, Tata Power and ACC were the top traded counters.

Despite the stock witnessing a sharp fall, the GAIL Jan futures added 12.84 per cent in open interest positions. For the second straight day, the counter saw a huge build-up in open interest positions.

The infotech counters were also at the receiving end ahead of IT bellwether Infosys's scheduled announcement of its Q3 performance next week.

The CNX-IT dropped over three per cent to 23,491.70 (24,234.30). The CNX-IT January contracts closed in premium at 23,868.50 (24,605.95); open interest positions, however, improved to 2,148 contracts.

IT counters such as Satyam, NIIT, Infosys, HCL Tech and Wipro were actively traded. Though these counters ended the day in negative territory, they added substantial open interest position.

Satyam Jan futures closed at Rs 365.55 (Rs 382.70) with open interest position improving by over 14 per cent to 8,281 contracts. The Satyam spot closed the day at Rs 360.75.

However, Tata Power bucked the general mood to end higher. The Jan contract closed at Rs 352.90 (Rs 341.95); open interest positions, however, fell sharply by close to 14 per cent to 3,677 contracts.