The Hindu Business Line : Much action likely in 14 new additions to NSE F&O segment

Mumbai, Sept 6 Heightened interest in the days ahead among investors in the cash segment is forecast for the 14 stocks that were added today to the futures and options segment of the NSE.

The new entries are 3i Infotech, Aptech, Bhushan Steel & Strips, Biocon, Havell India, NIIT Technologies, Sasken Communication Technologies, Tech Mahindra, Tulip IT Services, Welspun Gujarat and YES Bank.

“These stocks now have a different status and the very fact that you can leverage your position on these stocks invites interest of investors, especially those with cash positions in these securities,” said Mr Aalap Shah, Derivatives Research Analyst, Dolat Capital Market Pvt Ltd.

The renewed interest will not hurt the share price, he added.

Although some of these stocks have been in the red on the NSE and the BSE, like Havell, Tulip and Welspun, Mr Shah said that over a 10-day horizon, all stocks start making money for investors.

Immediate past data does tend to confirm this view.

The 31 stocks added by the NSE on May 14, including Petronet LNG, Air Deccan and India Infoline, out-performed the market by more than two per cent, he pointed out.

Incidentally, all the stocks added today ended at a premium to price in the cash market, as investors had reduced their short positions.

There has been some criticism against the choice of some of the stocks on the grounds that they suffer from poor liquidity in the cash segment.

The need for hedging that a derivative instrument such as futures offers is linked to extensive investor interest, a condition that some of them did not enjoy, some market players argued.

lengthy process

But Mr Shah said: “These stocks are selected after quite a lengthy process wherein they are tracked for six months and the selection methods given by SEBI are followed.”

He added: “They are scientific enough and definitely follow logic; there should not be a reason to worry.”

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