Monday, January 11, 2010

BSE NSE Outlook for 11-15 Jan 10

Market mood indicates horizontal or downward move in the next week on likely impact of rupee appreciation on future earnings of some of the major IT players

Despite buoyant trend in the international market, the Indian market continued to look southward for straight second day on concerns of appreciation rupee that could have a significant bearing on the realizations of the Indian IT sector. Thus IT stocks, besides the metal and the banking stocks edged lower during Friday 8th January 2010. The S&P CNX Nifty corrected 18.35 points during the day to close at 5244.75. Although for the full week under review the benchmark underlying rose by 43.70 points. All throughout the previous week the nifty future closed at a premium to the underlying. The average volume in the futures and options (F&O) segment during the week under review was Rs 51350.80 crore, thus being insignificant despite the extended trading hours since the start of the new calendar year.

The nifty future started the week with excellent long built-up however during the past 2 days it shed some of its open interest (OI) due to profit booking. For the full week though the nifty January 2010 series added 21.54 lakh shares in OI to take the total OI as on 8thJanuary 2010 to 2.42 crore shares. Similar was the trend in some of the frontline stock futures as well. Reliance January series for e.g. added 26.24 lakh shares in OI to take its total OI to 1.13 crore shares, while Tata Motors and Unitech added 15.12 lakh shares and 63.27 lakh shares in OI. Tata Steel during the week though shed its OI by 6.87 lakh shares. Sail, Bharti and Rcom also added OI by 12.18 lakh shares, 14.99 lakh shares and 14.32 lakh shares respectively during the week under review. Maruti also added 10.62 lakh shares in OI during the week ended 8th January 2010.

Although the week started on a positive note, there was evident profit booking to wards the end of the week. Besides there were some negative indicators in the nifty option front as there was aggressive call writing at the 5200 and the 5300 strikes. Similarly there was some covering of put earlier wrote at the 5000 and 5100 strikes. Besides there was fresh put buying at the 5200 strike put. Thus the indications are clear negative.

Volume in the Futures & Options segment of the NSE (Turnover (Rs. Crore.)
DateIndex FuturesStock FuturesIndex OptionsStock OptionsTotal
Source: NSE

Overall the market wide OI on Friday stood at 185.26 crore shares. Of these major additions in OI was witnessed in the stock options segment, while there was fair addition in index options and stock futures front as well. (See table OI breakup).

Open Interest (OI) break-up as on 8th January 2010
Open Interest (OI)*Change**
Market wide185.263.21
Index Future2.77-0.02
Stock Future149.390.84
Index Options9.150.23
Stock options23.942.16
* No of shares in crores
** Change is vis-à-vis previous day
Source: NSE

The most active options in the January series were the 5200 to 5400 strike calls and 4900 to 5200 puts. Call strike witnessed addition of OI due to fresh call writing at the above mentioned strikes, while the puts witnessed fresh buying. The OI in 5200, 5300 and 5400 strikes increased by 1.04 lakh shares, 4.56 lakh shares and 0.74 lakh shares to 29.49 lakh shares, 48.09 lakh shares and 43.67 lakh shares respectively. The OI in 5000 and 5100 strike puts decreased by 0.28 lakh shares and 0.47 lakh shares to 52.49 lakh shares and 37.17 lakh shares respectively. The 5200 put witnessed fresh buying to take its total OI to 45.40 lakh shares as on Friday. (See most active Nifty options table).

Most active Nifty options (January 2010 series)
Nifty 52002948750
Nifty 53004808500
Nifty 54004367200
Nifty 56001380200
Nifty 49002906350
Nifty 50005248900
Nifty 51003717250
Nifty 52004540350
Source: NSE

Top 10 Open Interest (OI) gainers in January series stock futures on 8th January 2010
Scrip NameOI*Change*% Change
* No of shares
Source: NSE

Top 10 Open Interest (OI) losers in January series stock futures on 8th January 2010
Scrip NameOI*Change*% Change
* No of shares
Source: NSE

Besides the global action the quarter result of some of the major market players that could be declared in the proceeding weeks will provide either directional trigger. The mood indicates horizontal or downward move in the next week, as the rupee appreciation concerns would impact the future earnings of some of the major IT players, which could have a dent on the index.

Source :

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Ingenious Investor

Equity Research Division

Ravina Consulting

No.429 Mahavir Tuscan

Near Hoodi Circle, Whitefield

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