March contracts in focus

DERIVATIVES REPORT

Volumes in the derivative markets continued to decline ahead of the expiry of the near-month February 2004 contracts.

However, most of the individual stock futures, which traded at a discount to the spot on Friday, traded at par or at a slight premium to their spot prices on Monday.

Moreover, activity rose in March 2004 contracts of Nifty futures. The total turnover on the National Stock Exchange's futures and options segment declined sharply to Rs 13,440.65 crore on Monday from over Rs 17,000 crore of turnover recorded in the past two trading sessions.

The most active stocks were the Nifty, Tata Motors, Tata Steel, Maruti Udyog, State Bank of India and Reliance Industries.

Open interest in Nifty February 2004 futures declined to 71.97 lakh from 75.04 lakh. Open interest in Nifty March 2004 futures was 20.16 lakh.

Nifty February as well as Nifty March futures were at a discount to the spot. Nifty February futures ended at 1,803.20 compared to spot Nifty closing of 1,808.20.

Nifty March futures ended at 1,802.90. In the spot market, Nifty tumbled 2.4 per cent today to 1,808.20, with the market extending last week's fall. The Nifty March 2004 contracts witnessed active trading, clocking a turnover of Rs 580 crore on Monday.

State-run stocks including GAIL India, ONGC and IPCL fell sharply and shed open interest. Rollover of positions was also witnessed in these counters to the March series.

Players are going short in futures of these counters in anticipation of lower issue price.

Reliance Industries added 3.6 lakh shares, Tata Motors added six lakh shares, Hindustan Lever added 7.5 lakh shares and Satyam Computer added 3.8 lakh shares in open positions. Tata Steel witnessed huge rollover of around 16 lakh shares.