Sunday, November 15, 2009

Indian Stock Markets BSE Sensex & NSE Nifty Outlook for 16-20 Nov 09

Derivatives: Absence of global or domestic triggers may induce horizontal moves going ahead

Though F&O suggest bullishness, the absence of any global or domestic triggers can lead to some sideway moment during the forthcoming days, but retail investors remaining nervous

Following the global market the Indian market continued to spiral up during the week ended 13th November 2009. The spiral-up during the previous week was mainly driven by the Foreign Institutional Investors (FII) as well as the Domestic Institutional Investors (DII) who were net buyers through-out the week while the participation by retail investors were irrelevant as far as the rise is concerned. They remained net sellers during the week. It shows evident signs of nervousness prevalent in the retail investors mind. Going ahead the market will closely watch any signs of unwinding of US Dollar carry trade. Many are borrowing the dollar and investing in high yielding risky asset, which has been a major factor behind the rally in the Indian market as well. Any rise in interest rate in the US besides US$ strengthening will reverse the carry trade trend and would hit the market severely. The hardening inflation in the domestic market besides policy tightening going ahead will have a significant bearing on the domestic market. The market continued its growth momentum during the previous week with the Nifty rising by 200.30 points to close the week at 4996.45. The Nifty future closed at a premium of 6.20 points at 5002.65 on Friday. The average futures & options (F&O) volume during the week ended 13th November 2009 was Rs 79228.39 crore.

In the F&O segment both the nifty future and some of the front-line stock future significantly added open interest (OI). For e.g. during the week the nifty added 7.92 lakh shares in OI and the total OI stood at 2.77 crore shares as on Friday. 9.71 lakh shares of OI were added during Friday.

Reliance added 55 thousand shares whereas Tata Steel and Tata Motors added 13.45 lakh shares and 24.81 lakh shares in OI respectively during the week ended 13th November 2009. Other major front-line stock futures viz- Infosys, ICICI Bank, DLF and Maruti added OI during the week under review, whereas Unitech, Sail and Rcom shed OI.

Volume in the Futures & Options segment of the NSE (Turnover (Rs. Crore.)
Date Index Futures Stock Futures Index Options Stock Options Total
30-Oct-09 19335 20280 36957 1765 78337
3-Nov-09 18772 18585 42334 1883 81574
4-Nov-09 16337 18084 35787 2032 72239
5-Nov-09 24104 21408 48721 2265 96499
6-Nov-09 16576 19259 39632 1929 77395
9-Nov-09 15328 17800 38812 1863 73802
10-Nov-09 16991 21511 40210 2296 81008
11-Nov-09 17546 20564 46544 2310 86964
12-Nov-09 18831 19816 41012 2431 82090
13-Nov-09 15878 16889 37663 1849 72278
Source: NSE

Overall the market wide OI on Friday stood at 173.67 crore shares, thus gaining by 2.04 crore shares as compared to the previous trading day. Index future added just 11 lakh shares in OI whereas the major addition was witnessed by the stock futures. (See table OI breakup).

Open Interest (OI) break-up as on 13th November 2009

Open Interest (OI)* Change**
Market wide 173.67 2.04
Index Future 3.23 0.11
Stock Future 131.59 0.54
Index Options 11.96 0.25
Stock options 26.89 1.14
* No of shares in crores
** Change is vis-à-vis previous day
Source: NSE

In the nifty option segment in-the-money strike nifty call witnessed unwinding of OI whereas at-the-money and out-of-the money nifty strikes witnessed addition of OI signifying fresh call buying at these strikes. However both out-of-the money and in-the-money nifty puts witnessed aggressive put writing signifying strong bullishness as far as the option indicators are concerned.

For the full week under review the nifty 5000 and 5100 strike call added 4.58 lakh shares and 14.34 lakh shares in OI and the total OI of both these strikes as on Friday stood at 38.72 lakh shares and 33.22 lakh shares respectively. The 4800 and 4900 strike puts added 32.25 lakh shares and 43.19 lakh shares in OI respectively during the week under review. Further the 5000 and 5100 strike puts added 32.96 lakh shares and 7.26 lakh shares in OI. Such aggressive put writing of these strikes indicates bullishness as the market expects the nifty underlying to easily cross these strike levels. (See most active Nifty options table).

Most active Nifty options (November series)

Nifty 4700 2278650
Nifty 4900 3045900
Nifty 5000 3872050
Nifty 5300 1869600

Nifty 4800 6239200
Nifty 4900 5614200
Nifty 5000 4621700
Nifty 5100 1075350
Source: NSE

Top 10 Open Interest (OI) gainers in November series stock futures on 13th November 2009
Scrip Name OI* Change* % Change
TECHM 948600 213600 18
SUNTV 339000 76000 18
JSWSTEEL 3567508 763024 18
PATELENG 726000 127000 15
BOSCHLTD 3000 500 14
PATNI 1004900 133900 12
NAGARCONST 2090000 260000 11
IVRCLINFRA 2666000 286000 10
TCS 4911000 516000 10
SINTEX 547400 56000 9
* No of shares
Source: NSE

Top 10 Open Interest (OI) losers in November series stock futures on 13th November 2009
Scrip Name OI* Change* % Change
BANKINDIA 1924700 -265050 -16
BRFL 5027800 -525550 -12
PTC 5205250 -538150 -12
APIL 680400 -70200 -12
ROLTA 3357000 -340200 -11
FSL 25156000 -2432000 -11
LITL 2139214 -160776 -8
UNIONBANK 1523550 -114450 -8
AXISBANK 2807100 -180000 -7
POLARIS 3679200 -226800 -7
* No of shares
Source: NSE

Although the market remained at high and the F&O indication are also suggesting bullishness, a lot will depend on the activity in the foreign market in the absence of any major domestic triggers. The market may continue its growth momentum citing global market. Also in the absence of any global or domestic triggers some sideway moment is expected during the proceeding days. The nervousness among retail investors still persists as evident from their lack of participation in the recent rally.

Source:Capital Market

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