FUTURES & OPTIONS

Ahead of the settlement week, the derivative segment witnessed brisk trading. Sentiment indicators like open interest, implied volatility, VIX and put/call ratio suggest small recovery from current levels in near term. On the options front, the maximum open interest in put-options is at 10,500 strike and maximum open interest in call option is at 10,600 strike. Techies say Nifty has already broken the rising trend line support and is all set to move lower towards the 10,27510,200 zone. Caution should be the watchword.

■ PNB scam has put the scanner on public sector banking stocks during the week ended. The sharp decline in Bank Nifty Futures was mainly led by PNB, which corrected 19.93 per cent after the detection of the ‘Nirav Modi’ fraud. Going forward, 25,000 psychological mark is a crucial support for Bank Nifty. Avoid PSU Bank stocks for present. With the new bankruptcy rules shifting the balance in favour of the creditor from the borrower, creating greater accountability major companies, global funds are on prowl to buy good stressed assets. It could be a once-in-a-lifetime opportunity. Expect news driven sharp stock specific moves.

■ Base metal counters may trade higher on recovery in global stock markets and resilient global manufacturing growth. During the week ended sharp rallies were seen in zinc, copper and aluminium. Buy Hind-alco, Hind Zinc and Veda-nta.

■ After the data set of consumer price inflation and WPI inched lower and IIP showed a good growth; renewed buying interest was seen in FMCG and capital goods counters. Use declines to buy Godrej Consumer and HUL. Start accumulating capital goods stocks.