Nifty out-of-the-money call witnessed aggressive call writing while the out-of-the-money put option witnessed aggressive put buying thus indicating absolute bearishness and constant resistance at the higher levels
>Inflation concerns & the slowing corporate earnings and higher cost of capital concerns resulted in the benchmark NSE falling significantly during the week ended 28th January 2011. Earlier during the week the central bank had raised the repo and reverse repo by 25 bps each in order to rein in inflation. However there are concerns that the RBI may further hike rate as the inflation especially the food inflation continue to remain higher. The food price index rose 15.57% and the fuel price index climbed 10.87% in the year to 15 January 2011, government data on 27 January 2011 showed. There are concerns that the RBI may further hike interest rates, thereby compromising the economic growth as the cost of capital for corporate rise. The market remained volatile during the previous week due to the fact that it was an expiry week and also because there was active selling by the Foreign Institutional Investors (FII) as some of the funds shifted away from emerging market portfolio. The benchmark nifty fell 184.35 points to close at 5512.15 during the week. However the nifty February series future premium widened 24.40 points to 5536.55 on Friday indicating that the selling was more profound in the cash segment.
The February series nifty added significant open interest (OI) on the expiry date of the January series as well as on Friday indicating shorts being created. On both these days it added 68.63 lakh shares and 9.86 lakh shares in OI to take the total OI on Friday to 2.04 crore shares. Similar was the trend in stock futures as well, as many of them added short positions. Similarly the nifty as well as stock option counters witnessed bearish positions being created. Overall in the futures and option (F&O) segment the trend indicated a bleak outlook. The average volume in the F&O segment during the week under review was Rs 168758 crore. The nifty out-of-the-money call witnessed aggressive call writing while the out-of-the-money put option witnessed aggressive put buying thus indicating absolute bearishness and constant resistance at the higher levels...
The index put-call ratio on Friday increased to 1.10 as compared to 0.96 the previous day, while the overall put-call ratio increased to 1.06 on Friday as compared to 0.94 on the previous day.
| Open Interest (OI) break-up as on 28th January 2011 | |||
| Open Interest (OI)* | Change** | Change# | |
| Market wide | 205.82 | 7.58 | -65.67 |
| Index Future | 2.38 | 0.16 | -0.48 |
| Stock Future | 178.29 | 0.66 | -29.83 |
| Index Options | 11.18 | 1.97 | -4.54 |
| Stock options | 13.98 | 4.80 | -30.83 |
| * No of shares in crores ** Change is vis-à-vis previous day # Change is vis-à-vis previous week Source: NSE | |||
The market-wide OI on Friday increased by 7.58 crore shares to 205.82 crore shares as compared to the previous trading day. Major addition was witnessed in the index and stock option segment. (See the OI break-up table)
| Most active Nifty options (February 2011 series) | |
| OI | |
| Call | |
| Nifty 5500 | 1606550 |
| Nifty 5600 | 3395100 |
| Nifty 5700 | 4313900 |
| Nifty 5800 | 4471250 |
| Nifty 5900 | 3551950 |
| Put | |
| Nifty 5100 | 2223150 |
| Nifty 5200 | 3026650 |
| Nifty 5300 | 3092350 |
| Nifty 5400 | 6749350 |
| Nifty 5500 | 5998600 |
| Source: NSE | |
The most active nifty options on Friday were the 5500 and up strike calls, which witnessed aggressive writing while the out-of-the money puts too witnessed aggressive addition of OI due to buying. The 5500, 5600 and 5700 strike call option added 10.72 lakh shares, 20.87 lakh shares and 12.79 lakh shares in OI due to writing to take these strikes respective total OI to 16.07 lakh shares, 33.95 lakh shares and 43.14 lakh shares respectively. The 5100, 5200, 5300 and 5400 strike puts added 14.90 lakh shares, 15.29 lakh shares, 12.69 lakh shares and 26 lakh shares respectively. (See the most active nifty option table)
| Open Interest (OI) of major February 2011 series stock futures as on 28th January 2011 | |||
| Open Interest (OI)* | Change** | Change# | |
| Reliance | 1.64 | 0.09 | 1.30 |
| Tata Motors | 0.87 | 0.02 | 0.58 |
| RCOM | 2.65 | -0.05 | 2.06 |
| SBIN | 0.32 | 0.00 | 0.21 |
| Tata Steel | 2.46 | 0.06 | 1.12 |
| * No of shares in crores ** Change is vis-à-vis previous day # Change is vis-à-vis previous week Source: NSE | |||
| Top 10 Open Interest (OI) gainers in January 2011 series stock futures on 28th January 2011 | |||
| Scrip Name | OI* | Change* | % Change |
| SUNTV | 223000 | 98000 | 78 |
| ORIENTBANK | 2277500 | 387500 | 21 |
| COREPROTEC | 2519000 | 414000 | 20 |
| SRTRANSFIN | 310500 | 49000 | 19 |
| ALBK | 1006000 | 145000 | 17 |
| IVRCLINFRA | 9990000 | 1298000 | 15 |
| LUPIN | 2916000 | 344000 | 13 |
| CANBK | 1006500 | 107000 | 12 |
| DLF | 17337000 | 1730000 | 11 |
| PFC | 766000 | 72000 | 10 |
| * No of shares Source: NSE | |||
| Top 10 Open Interest (OI) losers in January 2011 series stock futures on 28th January 2011 | |||
| Scrip Name | OI* | Change* | % Change |
| HINDZINC | 207000 | -60750 | -23 |
| NMDC | 549000 | -125000 | -19 |
| CROMPGREAV | 1035000 | -231000 | -18 |
| HCLTECH | 1439500 | -167000 | -10 |
| WIPRO | 2910000 | -325500 | -10 |
| ITC | 11292000 | -1252000 | -10 |
| APOLLOTYRE | 18224000 | -1628000 | -8 |
| PETRONET | 2594000 | -228000 | -8 |
| LITL | 11192000 | -932000 | -8 |
| BHARTIARTL | 7586000 | -626000 | -8 |
| * No of shares Source: NSE | |||
The earnings season seems to have been a no event for the market so far, as there have been not many surprises there. The intermediate trend is bearish and the market will look at the forthcoming budget for any positive clues. Any balancing measure taken by the government to lower food inflation and maintain economic growth will be closely watched till the budget.
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