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K.S. Badri Narayanan

AFTER breaching the crucial 1400-mark on Friday, the National Stock Exchange's S&P CNX Nifty gained over 3 per cent during the week to close at 1398.40 as against the previous week's close of 1356.55. However, the average daily turnover during the week fell to Rs 7,804 crore as against the previous week's Rs 8,981.20 crore. (The August month contracts expired last week, hence the higher turnover).

Index futures

Nifty: The near-month September futures on Nifty closed the week at 1401.60 as against last week's close of 1355.80. The Nifty September futures ended the week in premium to the Nifty close by 3.20 points, signalling a bullish undertone. (Last week, the September contract had ended in discount). Open interest also jumped to 22,448 contracts from last week position of 19,240.

CNX-IT: This contract, which was introduced for trading last week, turned active. Those who were long on the CNX IT September futures could have seen their position with handsome profits as it ended the week on a higher note at 16738.40. The CNX-IT futures also ended the week in premium to the underlying index, which closed the week at 16712.60, gaining 11 per cent. The market lot for CNX-IT contracts is 20.

Stock futures: Tata Steel was the most active counter during the week. Contracts on HPCL, Reliance, Satyam Computer, SBI, Tata Motors and Infosys also attracted market attention.

The September futures on Tata Steel ended the week on strong note at Rs 270.20 (Rs 261.45), and in premium to the spot close of Rs 267.20. Open interest position improved to 7,867 contracts (7,148). Cost-of-carry for Tata Steel September futures declined to 16.42 per cent, indicating a negative bias in the stock.

The HPCL September futures ended the week at Rs 414.25 as against the previous week's close of Rs 423.20 and in premium to the underlying equity close of Rs 410.10. The HPCL stock was gaining steadily during the week but closed sharply lower after it turned ex-dividend. The stock was volatile during the week and touched an intra-week high of Rs 444.80 and a low of Rs 376.

Open interest has been declining in the last three days though on week-on-week basis it improved to 6,752 contracts (6,331 contracts). Investors need to tread cautiously on the counter as the Supreme Court reserved its order on disinvestment; the counter may witness volatile action in the weeks to come.

Index options: With the spot Nifty ending close to the 1400 mark, the September 1400 call and the 1410 call turned active during the later part of the week. Apart from these, the September 1380 calls also attracted market attention. Among the puts, the September 1360, 1350 and the 1380 strikes turned active.

The out-of-the money 1400 calls closed the week sharply higher at Rs 34 (Rs 27.05) and open interest improved from 835 contracts to 2184 contracts. The in-the-money (ITM) 1380 calls ended the week higher at Rs 47 (Rs 35.95) and open interest improved to 1033 contracts (377 contracts).

On the other hand, the deep out-of-the money Nifty 1360 puts ended the week lower at Rs 17.25 (Rs 33.90) with open interest improving sharply to 525 contracts (163 contracts).

The put-call ratio (PCR) (based on open interest positions) improved to 0.79 as against last week's ratio of 0.60, indicating an overbought market.

Equity options: With the market witnessing a sharp rally, call options were the most active ones as compared with puts. Counters such as Tata Steel, Satyam, Reliance, Infosys and HPCL witnessed smart activity. The September 440, 430 and the 460 strikes on HPCL, the September 420 strike on Reliance, the September 250 strike on Satyam Computer and the September 4100 and the 4000 strikes on Infosys were active among call options.

Among the puts, the September 250 and the 240 strikes on Satyam, the September 260 and he 250 strikes on Tata Steel and the September 4100 strike on Infosys were actively traded.

The open interest PCR on Infosys and Satyam was higher, indicating the tech majors are in overbought positions.

If you have any queries relating to the futures/options please mail them to Futures & Options, Kasturi & sons, 859-860, Anna Salai, Chennai 600 002 or email them to

fno@thehindu.co.in

with a mention of futures/options in the subject line of the mail.

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