The Nifty closed on a positive note on Friday on the back of a strong spike in volume in the last one hour of trade. Overall, derivatives volume declined by over 25 per cent on Friday as participants preferred to stay away from the market on account of the weekend as well as range-bound movement in markets.
The Nifty moved in a narrow band of 25 points throughout the day. According to an intraday chart, 72 per cent of the volume was traded between 5,375 and 5,395 and around 24 per cent above 5,395.
The Dow Jones Industrial reacted sharply on Friday, slipping 2.52 per cent due to the disappointment over the weaker-than-expected second-quarter revenues of Bank of America, Citigroup and General Electric. The SGX Nifty, too, reacted to the global cues and closed at 5,355 — down 44 points over the counter at the Singapore Stock Exchange. This means the Nifty is likely to open around this level on Monday.
However, there is no sign of a sharp fall in the Nifty as derivatives participants have not started liquidating their positions as yet. There has been some profit-booking from foreign institutional investors (FIIs) in the last couple of days, according to the open interest (OI) position in the derivatives segment.
The Nifty July futures closed at a four-point premium on Friday and added 817,850 shares in OI. But, according to intraday trading data, more sell-side orders from top traders and a change of hands from mid-size (50-100 contracts) participants have been generated, indicating a build-up of short positions on Friday.
According to Bloomberg data, the Nifty moved up sharply in the last 45 minutes on account of the spike in volume. The time-price opportunity (TPO) data for the day showed strong support at 5,362, while the spike in volume in the last hour projected a 5,426 level for the Nifty. However, profit-booking from almost all traders and poor volumes suggest a subdued opening on Monday.
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Among stocks futures, TCS gained 6.23 per cent on a strong first-quarter performance. The July futures of TCS saw a 30 per cent rise in OI, mostly through buy-side trades. A price projection on the basis of TPO as well as volume data suggests a fresh rally in TCS at around Rs 860.
IFCI rose 5.7 per cent on strong buying activity during the closing hour. TPO data suggests strong support for IFCI at around Rs 57.70.