Markets Last Week

The total rollover stood at 20 per cent, marginally lower than the six months' average of 22 per cent. The Nifty rollover was at 17 per cent against an average of 20 per cent. Stocks witnessing active rollover are S Kumars (65 per cent), Bharat Forge (50 per cent) and Aban Lloyd (44 per cent). The stocks that have seen net increase in futures OI are Reliance Energy (1.5 million), ICICI Bank (1.2 million) and Hotel Leela (1 million).

Stocks that have seen decrease in futures OI are RNRL (2.3 million) and IFCI (1.8 million).

Market Position

Open interest in futures and options contracts on a stock is capped at 20% of the free-float holding. If open interest hits over 95% of the MWPL (market wide position limit), fresh open interest is restricted, and the underlying stock can only be bought in cash markets or from a seller in the derivatives market.

The change in OI with a rise in market price indicates long positions.

The change in OI with a fall in market price indicates profit booking.

Sector Analysis

Bulls gained more territories last week with buying fever seen across all sectors except information technology and pharmaceuticals. The rupee and Infosys guidance punctured IT stocks rally, while pharmaceutical stocks were laggards due to lack of interest. Major gainers were Steel Authority of India, GMR Infra, Bank of India, CESC, JSW Steel, Oriental Bank, Hindalco, GNFC, Reliance Energy, Sterlite, etc. The open interest in these stocks increased with upward movement in market price. However, profit booking in GMR Infra and Reliance Industries stocks was seen on Friday, which likely to hurt sentiment in these stocks.

Put-call ratio

Nifty PCR (OI) moved up to 1.63 from 1.52 last week. Nifty call options added 24.3 lakh shares (+17.5 per cent) and put options added 54.2 lakh shares (+25.6 per cent) in open interest last week. Nifty 4350-4300 levels are expected to offer strong support to the markets in case of any downside as Nifty 4300 & 4350 put options together hold 86 lakh shares and represent 32.3 per cent of total put open interest. A shifting of position in Nifty options from 4200-4300 levels to 4400-4500 levels seen is a positive sign.

Nifty 4500 call options added 18.9 lakh shares in open interest during the week and 4400 call options added 8.8 lakh shares in open interest.

Stock Of The Week: GMR Infrastructure

Last week's close (Rs) 910.85; Previous week's close (Rs) 741.08

GMR Infrastructure was one of the top gainers in the last one week as the stock rose 23 per cent after touching an all time high of Rs 1,005. The company announced the order worth about Rs 11,000 crore in consortium for construction of a new international airport at Istanbul. The stock has risen 63 per cent in little less than a month, followed by its robust financial performance in FY07. While the total income grew 61 per cent to Rs 1,715 crore, net profit rose 14.5 per cent to Rs 174 crore. Further, the company's stock price got an added boost due to the announcement of the stock split of shares from Rs 10 per share to 5 equity shares of Rs 2 each.