FUTURES & OPTIONS

Ahead of the settlement week, derivative segment witnessed brisk and volatile trading. Nifty Futures closed higher for the eighth week.

In the options segment, the 11,600-strike call has the highest open interest and 11,400-strike put has the highest open interest.

The PCR OI for the week closed at 1.63 which indicates OTM call unwinding and put writing. Broadbased participation was witnessed with Capital Goods, Power, Metals, IT and Pharma stocks leading the surge.

Despite Nifty scaling newer highs, Bank Nifty fell 1.04 per cent as heavyweights like ICICI Bank, HDFC Bank, InduSind Bank, Kotak Bank, BOB were on weak wicket. With the fate of about 70 big-ticket stressed accounts with loans of over `3.8 trillion uncertain as the deadline of August 27 for firming up resolution plans for them approaches, bank counters witnessed mild selling. Failing to stitch a plan might leave lenders with no choice but to take these companies to the bankruptcy court.

Contrarians can use sharp corrections to buy for good long term gains.

After a mixed July due to the nationwide transport strike, industry watchers are looking forward for broad revival in August auto sales. Automobile stocks like Maruti Suzuki, Tata Motors, Ashok Leyland, Bajaj Auto, TVS Motor, Hero Motocorp, Eicher Motors and Escorts will be closely watched.

Stock-specific activity indicated in Metals space. Expect JSW Steel, Hind Zinc and Tata Steel to outperform. Punters tip buying in these stocks for surprising gains.

Buy Aurobindo Pharma, Divi Labs and Lupin. (C. Kutumba Rao is an avid follower of stock markets. This newspaper is not liable for decisions made on the basis of this column. Views expressed in the article are personal views of the writer.)