F&O turnover at Rs 25000 cr

The futures and options (F&O) market hit its peak with turnover touching an unusual high of Rs 25,000 crore on Friday.

Market analysts suggest caution on the F&O market hitting its `buying climax' by now. This indicates that the market has hit its peak and it is advisable for investors to keep in the sidelines and wait for the next trigger, some analysts said.

"The market has hit its peak turnover of Rs 25,421 crore against the usual range of Rs 12,000- 16,000 crore. Profit-booking was seen taking place widely, on Friday being the expiry day. Open interest was pegged at Rs 15,105 crore on over 5.84 lakh contracts," Ashu Bhagri of Asit C Mehta Investment Intermediates, told Business Standard on Friday.

"FIIs, which had been trading on the arbitrage opportunities arising between the cash and derivatives segments till recently, have stuck to the cash market, without increasing their exposure in the F&O market. The net position of FIIs were in the negative in the last two trading sessions. Still the F&O segment recorded high turnover," Bhagri added.

"The market peaking in turnover on Friday shows that the market has reached its 'buying climax', which represents that the market spiralled too fast and too soon in the past," a dealer with a leading broking firm said.

"This means that it is the time to go neither short nor to take up long positions. In the next two (trading) days, investors should keep on the sidelines and watch for a new cue to enter the market," the analyst added.

ONGC rig fire is seen to have been a drag on the Nifty during the day. Sensex posted a rise of 30.39 points to touch 7635.4 points, while Nifty lost 6.80 points to touch 2312.3 points.

Nifty July futures closed at 2317, while that maturing in August closed at a 22 point discount to the spot closing. However, the star performer in the index segment was Bank Nifty Futures rose in line with the spot market, where many bank stocks have gained.

The July Bank Nifty Futures which expired on Friday, gained by Rs 86.65 to touch Rs 4360 . The August futures gained by Rs 96.8 to touch Rs 4348.

In the stock futures Infosys shined and was identified by some analysts as a promising counter in the F&O segment in the next few days. The June Infy price gained by Rs 29 to close at Rs 2268, while August futures closed Rs 2,274, up by Rs 23.70.