Open interest declines

DERIVATIVES REPORT

Most stock futures traded at a discount to the underlying spot market, indicating the market is in oversold zone.

Moreover, Nifty futures ended at the same level as spot, indicating cautiousness of market players. The open interest in Nifty February 2004 futures declined slightly to 79.31 lakh on Thursday from Wednesday's 79.56 lakh.

The Nifty February 2004 futures ended at 1,804.80 compared to the spot Nifty closing of 1,804.50. Spot market witnessed a volatile trading today. Nifty shed 17.70 points or 0.9 per cent to 1,804.50. Basket selling by funds triggered fresh fall in the market.

Meanwhile, the turnover on the National Stock Exchange's Future & Option segment surged to Rs 17,655.70 crore from Rs 15,321.77 crore on Wednesday. The turnover in Nifty February 2004 futures rose sharply to Rs 6,111.33 crore from Rs 5,318.30 crore on Wednesday.

In an extremely volatile market, traders preferred to square up positions in select stocks such as Reliance Industries (RIL), State Bank of India (SBI), Satyam Computer, and Maruti Udyog (MUL). Open interest in Infosys shed 40,000 shares.

Open interest in Satyam came down to 4.5 lakh shares. Auto stocks exhibited a mixed trend. Tata Motors added around five lakh shares in open positions.

On the other hand Maruti shed 4.5 lakh shares and Bajaj Auto shed 8,000 shares in open positions. In the last three days Bajaj Auto has shed close to 24 per cent in open interest and the stock has held firm. Hero Honda also lost 10 per cent in open interest.

Oil stocks saw considerable action. HPCL added 2 2 lakh shares and BPCL added one lakh shares or 20 per cent in open interest. GAIL continued to lose open interest and shed seven lakh shares in futures.