Q2 results, IIP data to dictate direction FUTURES & OPTIONS

Derivative segment witnessed brisk stock or sector specific trading during the week ended.

Mirroring the bullish undertone rollovers of Nifty/Bank Nifty stood at 73 per cent/69 per cent as against 70 per cent/65 per cent. Rollovers for Nifty were higher in terms of percentage as well as total open interest in comparison with last month and last three-month average. Momentum can carry Nifty upto the immediate resistance level of 10,500 say punters.

On the options front, November series starts with the maximum open interest in put options at 10,000 strike and maximum open interest in call option at 10,500 strike.

On the back of the announcement to recapitalise PSU banks, Bank Nifty witnessed a mega rally during the week ended. Bank Nifty currently faces strong resistance at 25,000. PSU banks were the flavor of the week with many surging over 30 per cent. PNB, Canara Bank, and SBI, touched fresh 52week highs.

Observers feel following the move the assumption that private banks can keep gaining market share from public lenders is “no longer as strong as it was earlier”. Use declines to accumulate PSU banks.

ICICI Bank and Axis Bank will benefit from the eventual clearing of nonperforming loans in the financial system. Buy on declines.

Infosys’ results were in line with expectations. The company will buy back 11.3 crore shares or 4.92 per cent of equity capital at `1,150 a piece. It will be spending `13,000 crore for the same. Stay invested in the stock for present.

The infra sector received much needed boost with the announcement of Bharatmala. Stay invested in low-debt infrastructure companies.

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.