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Our Bureau

Chennai, May 27

Nifty May future closed on Tuesday in steep discount at 4842.35 against the spot close of 4859.8, mainly on account of creation of fresh short positions, particularly during the second half of the trading sessions.

The Nifty June future closed at 4838.35 and added 20 per cent or 33.25-lakh shares in open interest. Rollover of open interest to June series stood at 45 per cent, which is quite healthy. However, rollover in stock futures remain rather lacklustre only.

Ahead of settlement (for May contracts), Nifty options saw spurt in activity. Among them, the most active are Nifty 4900 put and Nifty 5000 call. There was huge accumulation in Nifty 5000 call. This suggests the emergence of call writers on the expectation that market might not move up sharply beyond 5000. On the other hand, the put saw some shedding in open interest, indicating profit-booking.

Volatility index, or famously known as India VIX, dropped sharply to 28.59. This drop in volatility index is generally considered as positive, as it points a range-bound or mild upside movement. The fall in volatility suggests buying in call option (a position taken on the view that the market will move higher).

Reliance Industries, Reliance Petroleum and Cairn India were the top-three traded counters. Among the individual stock futures, Reliance Communications and HDIL stole the limelight. The former saw a healthy rollover of about 62 per cent in open interest positions.

HDIL May future gained about 3 per cent to close at Rs 744.20, against the spot price close of Rs 741.20. Rollover of open interest stood at about 35 per cent.

Foreign institutional investors turned net buyers (Rs 149 crore), thanks to their heavy buying in options, both index and stock. However, they were net sellers to the tune of Rs 233.6 crore in index future and Rs 36.75 crore in stock futures. In the cash segment, they were net sellers of Rs 496.61 crore, according to the NSE provisional data.

More Stories on : Derivatives Markets | On the hedge

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