Rollover to February contracts on

DERIVATIVES REPORT

With just five days left for expiry of January 2004 contracts, traders further liquidated or rolled over their positions to February contracts (in a roll over, a trader liquidates the position for the current month and takes fresh position for the forthcoming month) on Wednesday.

Also, the premium on most stocks vanished and several stocks traded at a discount to the underlying spot market. Cost of carry across counters too fell, indicating arbitrageurs offloading their positions or not keen to carry forward positions as of now.

Meanwhile, the overall turnover on National Stock Exchange's future and option segment declined slightly to Rs 16,320.71 crore on Wednesday compared with Rs 16,508.97 crore on Tuesday.

Liquidation of positions in the derivatives market has added to the setback witnessed on the bourses in the last two days.

In the spot market, the S&P CNX Nifty tanked 68.65 points or 3.6 per cent on Wednesday to 1,824.60. The Nifty January 2004 futures ended at a premium to the spot at 1,840.

Open interest in Nifty January 2004 futures declined to 83.79 lakh from Tuesday's 89.82 lakh.

Meanwhile, open interest in January 2004 futures of Tata Motors, M&M, Maruti Udyog (MUL), Tata Power and Satyam Computer declined.

Open interest declined in January 2004 futures of Reliance Industries (RIL), Tisco and State Bank of India (SBI) as well.

With expiry of January 2004 contracts nearing, a number of individual stock futures are trading at a discount to the spot prices.

Nifty futures added around six lakh shares in open interest and traded at a discount to the spot Nifty due to heavy selling.

Turnover in the Nifty January 2004 futures rose to Rs 5,613.86 crore, from Rs 5,400.93 crore on Tuesday.