FUTURES & OPTIONS

Ahead of the settlement week derivatives segment witnessed brisk trading.

Nifty Futures closed at 9118.3, marginally down by 53.45 points or -0.58 per cent since last week. Bank Nifty closed down by 93.85 points or -0.44 per cent to close at 21140.65. Nifty Futures open interest stood at 339.55 lakh, increased by 7.08 per cent from 317.10 lakh of previous week. The annualized Cost of Carry increased to 6.88 per cent from 6.66 per cent.

Sentiment indicators like put/call ratio, implied volatility, VIX and open interest suggest further weakness in near term.

In Nifty options segment, on the call side the 9200-strike call has the highest open interest and on the put side 8800-strike put has the highest open interest.

Sector wise open interest increased in textiles, automobile, IT, financial, metals, telecom and bankNifty. Forthcoming week is likely to remain volatile on expiry of F&O march contract and rollover of position to next month series. Nifty futures may trade widely in the range of 9250-9325 on upside and 9000-8975 on down side in coming week.

Statement from finance minister on policy for quick settlement of NPAs triggered action in banking counters. PSU banks witnessed good buying. Stay invested for further gains. Weakness in rupee and continued regulatory issues with US FDA led to range bound trade in IT and Pharma sectors. Weakness was seen in TCS, Divi Labs and Dr Reddy.

Following pressure, many PSUs have declared special dividends. Buy PSU counters cum dividend.

Stocks looking good are BOI, Bharat Financial, BPCL, DCB, HDFC, Kotak Mahindra Bank, M&M Finance, REC, Reliance Capital and Wipro.