Date:05/06/2008 URL: http://www.thehindubusinessline.com/2008/06/05/stories/2008060551451500.htm

Back Fresh shorts seen in Nifty future; 4500 put adds 11.22 lakh shares

Our Bureau

Chennai, June 4 Trading volumes surged sharply to Rs 48,378.31 crore against Tuesday’s figure of Rs 40,448.71 crore, which is quite higher compared with the previous few months’ average volumes during the first week of new series.

Nifty June future closed at 4568.75, a drop of 2.94 per cent, and at a discount to the spot close of 4585.6. This indicates that a lot of short positions were added in today’s trade.

Put options on Nifty were the most active. Among them, 4600, 4500, 4700 and 4800 strikes were actively traded. Among the call options, 4700 and 4800 strikes attracted the maximum attention.

The 4600 and 4500 put saw sharp surge in open interest positions. The latter alone saw accumulation of 11.22 lakh shares or 46.76 per cent in open interest positions, indicating the next support level for the Nifty. On the other hand, 4700 call also witnessed addition of open interest positions, indicating the emergence of call writers. This suggests that 4700 could act as a resistance for the Nifty.

India VIX or NSE volatility index increased marginally to 29.42 from Tuesday’s level of 28.49.

Stock futures

Reliance Industries was the most active followed by Reliance Petroleum and Tata Steel. While petroleum counters Reliance, Reliance Petroleum, ONGC and Cairn India added open interest positions, Essar Oil shed 12.4 per cent or 8 lakh shares. This indicates negative sentiment for Essar Oil.

FIIs turn buyers

Foreign institutional investors turned net buyers to the tune of Rs 335 crore in the F&O segment on Wednesday on the NSE. However, they remained net sellers to the tune of Rs 1,198.8 crore in the cash segment, according to the provisional data provided by the NSE.