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 13^th 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 13^th 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 13^th 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)
	OI
Call
Nifty 4700	2278650
Nifty 4900	3045900
Nifty 5000	3872050
Nifty 5300	1869600
Put
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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