The Hindu Business Line : Open interest declines in top counters

DESPITE bear hammering, trading activity picked up at the derivative segment on the National Stock Exchange on Monday; turnover stood at Rs 10,824.65 crore against Friday's figure of Rs 7,612 crore.

The improved contribution of the options segment to the total trade, albeit marginally, indicates that traders are hedging their long cash positions. Today, options contributed about 11 per cent of the total market, an improvement from 8 per cent on last Wednesday.

Index futures: After touching a low at 1742.80 in intra-day, the NSE's Nifty closed 1766.70, losing 1.64 per cent. The Nifty May futures closed at discount to the spot close at 1752.20, a wide gap of 14.5 points. Open interest improved by 15 per cent to 50,278 contracts.

The market drifted down on the back of a fall in heavyweight ONGC and ended the trading session at 1766.70, down 29.40 points. Volumes were higher at Rs10,800 crore. The most active futures contracts were the Nifty, Tisco, Reliance Industries, Tata Motors and SBI.

Nifty futures continued to trade at a steep discount of around 11 points to the spot Nifty and the open interest increased by around 11 lakh shares. The Nifty June contracts finished at discount at 1759.20 and open interest improved 54 per cent to 459 contracts. The unmatched order book on the NSE for Nifty contracts for May and June suggested a divergent view. While sellers outnumbered buyers for Nifty May futures by 1.5 to 1, for June futures buyers dominated sellers 5 to 1. This means that traders are bullish over the long term.Stock futures: Among the most actively traded contracts were Tata Steel, Reliance, Tata Motors, SBI and Maruti.

The Tata Steel May futures closed the day sharply lower at Rs 344.85 against the previous close of Rs 360.20 but at premium to the spot close of Rs 342.50; open interest positions improved by 7.5 per cent to 17,574 contracts. High cost of carry and unmatched order book suggest negative outlook for the counter.

Among the top traded counters, only Reliance, Satyam and Gujarat Ambuja Cement added more shares in their open positions, while ONGC, Tata Motors, Maruti, ACC, Infosys, Andhra Bank, Union Bank and HDFC all shed shares in the open interest positions, indicating the market nervousness.

Options: Among the calls, the Nifty May 1800, 1750, 1900, 1850 strikes, the Reliance May 540 strike and the 360 and 350 strikes on Tata Steel were the most active. Among the puts, the Nifty 1750, 1800, 1700 and the 1760 strikes, Reliance May 520 strike and the 350 strike on Tata Steel were actively traded.