..

>High crude price resulting from the on going Egyptian crisis, high domestic inflation which could result in further monetary tightening that could further impact the corporate earnings; and the political uncertainty caused the domestic market to correct sharply during the week ended 4^th February 2011. The benchmark NSE nifty fell 116.40 points to close at 5395.75 on Friday. There are major concerns on the inflation front and the spill over impacts of the 2G spectrum scam investigation.

The earnings season so far has been a no event and there are concerns of the corporate earnings declining due to high interest rates and high crude oil prices. The nifty February future too closed at a discount of 8.75 points on Friday after remaining at a premium all throughout the week. The February series nifty added 28.91 lakh shares in open interest (OI) on Friday to take the total OI to 2.48 crore shares, thus indicating that the OI addition was due to aggressive short built-up. The trend in the nifty has been similar all throughout the week.

But any positive trigger may witness sharp up move as these shorts get covered. Similar was the trend in the stock futures as well. In the nifty option front too most of the nifty out-of-the-money call witnessed aggressive fresh call writing while in-the-money puts witnessed aggressive fresh buying, while the stock options too build negative positions indicating the negative mood. 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 120745 crore. ..

>

The index put-call ratio on Friday fell to 0.91 as compared to 0.95 the previous day, while the overall put-call ratio fell to 0.89 on Friday as compared to 0.91 on the previous day.

Open Interest (OI) break-up as on 4th February 2011
	Open Interest (OI)*	Change**	Change#
Market wide	229.91	4.22	24.09
Index Future	2.95	0.34	0.58
Stock Future	185.46	0.66	7.18
Index Options	14.31	0.85	3.13
Stock options	27.19	2.37	13.21
* 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 4.22 crore shares to 229.91 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 5300	1260550
Nifty 5400	5030650
Nifty 5500	6666900
Nifty 5600	5467100
Put
Nifty 5200	5955100
Nifty 5300	5096400
Nifty 5400	8610750
Nifty 5500	4955400
Source: NSE

The 5300 and up strike call added significant OI due to writing indicating bearish mood in the market. The most active was the 5400 and 5500, which added 30.1 lakh and 18.9 lakh shares in OI. The total OI of these two strikes stood at 50.3 lakh shares and 66.7 lakh shares respectively. Such high concentration here also indicates resistance at these levels. Similarly the 5100 and 5200 strike put added OI due to buying. For e.g. both these strikes OI increased by 3.59 lakh shares and 11.20 lakh shares respectively to take their respective OI to 31.27 lakh shares and 59.55 lakh shares. (See the most active nifty option table)

Open Interest (OI) of major February 2011 series stock futures as on 4th February 2011
	Open Interest (OI)*	Change**	Change#
Reliance	1.58	0.03	-0.07
Tata Motors	0.97	0.04	0.10
RCOM	2.72	0.03	0.07
SBIN	0.34	0.01	0.02
Tata Steel	2.01	-0.11	-0.45
* 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 4th February 2011
Scrip Name	OI*	Change*	% Change
ITC	17198000	3220000	23
ONGC	3427750	567250	20
VOLTAS	1659000	268000	19
WIPRO	3265000	482000	17
CUMMINSIND	439500	55500	14
HAVELLS	178000	20500	13
NAGARCONST	4034000	434000	12
VIJAYABANK	10024000	1072000	12
JINDALSTEL	2813000	298000	12
GAIL	2506000	237500	10
* No of shares Source: NSE

 

Top 10 Open Interest (OI) losers in January 2011 series stock futures on 4th February 2011
Scrip Name	OI*	Change*	% Change
BIOCON	2679000	-398000	-13
BATAINDIA	278000	-36000	-11
ANDHRABANK	2266000	-274000	-11
EXIDEIND	1616000	-194000	-11
SINTEX	3418000	-378000	-10
RECLTD	4321000	-471000	-10
MAX	866000	-94000	-10
BAJAJ-AUTO	1780000	-161500	-8
RENUKA	37100000	-3352000	-8
TV-18	2656000	-232000	-8
* No of shares Source: NSE

The market will keenly await the forthcoming budget for any positive clues, besides in the short term the market will monitor the political climate in the country and the global mood in the context of the Egyptian crisis. Any positive trigger domestically or internationally will cause sharp up-move as the market appears oversold now. However in the absence of any news, the overall outlook is bearish.