Markets Last week

The Nifty saw a rollover of 79 per cent and the market-wide rollover was nearly 84 per cent. Rollover of over 90 per cent was seen in UltraTech Cement, Jindal Steel, Cipla, Tata Chem, BRFL, MTNL, Sobha Developers and MRPL.

Around 86-90 per cent rollover was seen in Kesoram, Punj Lloyd, Patni Computers, Nagarjuna Fertilisers, S Kumars and Parsvanath Developers. Around 80-85 per cent rollover was seen in stocks such as Grasim, L&T, Tata Motors, Dr Reddy's, Hindalco, Maruti, Vijaya Bank, ACC, and Ambuja Cement.

Sector analysis
Long build up was seen on Friday in stocks such as Ambuja Cement, Reliance Industries and Union Bank of India and these stocks may show strength. Looking at impressive rollovers in banking stocks, the expectation are that the ongoing correction may serve as an opportunity for buying banking stocks. Rollovers were healthy in Union Bank, Bank Of Baroda, Punjab National Bank and IFCI. Unwinding of positions was seen in stocks such as Canara Bank, CESC and Colgate on Friday.

Put-call ratio
The Nifty put-call (PCR) open interest (OI) moved down to 1.42 from 1.73 last week on account of expiry of the July series contracts. Nifty call options shed 53.5 lakh shares (29.7 per cent) and put options shed 1.3 crore shares (42 per cent) in OI on w-o-w basis.

The Nifty 4500 put options hold 57.9 lakh shares representing 32.1 per cent of total put OI. And the Nifty 4500 call options hold 31.4 lakh shares representing 24.8 lakh shares in OI. We expect 4500 levels to offer resistance in coming days.

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.

STOCK OF THE WEEK: ITC

Last week's close (Rs) 171.80;
Previous week's close (Rs) 154.35
Despite a decline on the market on Friday, ITC ended the day with a gain of 3.12 per cent. The stock was among the top gainers last week, rising by 11.31 per cent at Rs 171.80. The company announced its first quarter results for 2007-08 this week. Its net profit rose by 20 per cent to Rs 783 crore, while net sales at Rs 3,325 crore grew by 16.7 per cent.

The company also announced an investment of about $2 billion in new hotels over the next seven years. To enhance its presence in the rural markets, ITC will increase its investments to boost its rural retail network and premium apparel retail stores. The company is also setting up two new paper mills and six carbon trading projects.