Nifty puts exceed calls

DERIVATIVES REPORT

In the futures and options segment of the NSE, the Nifty puts have exceeded the Nifty calls and the ratio now stands at around 1.01:1.

Dealers said that the market should rally now since people will be shorting expecting the market to go down and then the short covering will force the market to go up.

This is a result of the bearish sentiments prevailing in the market, indicated by the high put-call ratio.

"There is a lot of bearishness in the market and investors are taking a contrarian view," said a dealer at IDBI Capital Markets.

It could also have the effect of a sideways movement so the market is likely to remain at the same level for sometime to come, they pointed out. The last time the puts exceeded the calls, the market had rallied.

With the July series to expire on Thursday, there is a rolling over of positions to the August series. Marketmen said that there has been a rollover to the extent of 20 per cent in Nifty futures. "Most of the rollover will take place on the last two days," dealers said.

Rollover was rather significant in case of Tata Steel (48 per cent) and Grasim Industries. In Tata Steel the open interest in its August futures went to 61.45 lakh. State Bank saw rollover to the extent of 45 per cent, HLL 49 per cent, Reliance 31 per cent and Tata Motors 30 per cent among others.

Meanwhile volumes in the derivatives segment surged up to Rs 11,583.61 crore mainly due to the rollover of positions. Index futures saw a turnover of Rs 3,823.36 crore while the turnover in stock futures was of the order of Rs 6,720.40 crore.

Nifty August futures ended at 1583.55 around 17.20 points discount to the spot closing.

Meanwhile, in the futures segment the most active contracts were those of Reliance, Tata Steel (both July and August series), State Bank and Tata Motors.

Foreign Institutional Investors, who were net buyers to the tune of Rs 83 crore, saw their cumulative positions as percentage of total gross market position in the derivative segment as on Monday at 18.43 per cent.