Stock markets last week

Domestic Market: The key index witnessed a fall for a fifth straight week after the inflation accelerated unexpectedly last week. The BSE Sensex fell 454 points to 12,430.4, while the S&P CNX Nifty declined 110 points to 3,608. Amandeep Chopra, who helps manage about $8.6 billion of assets at UTI Asset Management Co in Mumbai, said, "Inflation was higher than expected, that's weighing on stocks.''

Global markets: An unexpected surge in inflation drove US stocks to their first decline in three days and erased all of the last week's rebound on concern the Federal Reserve is unlikely to lower interest rates this year. Stocks retreated this week on speculation that home loan defaults would curb economic growth. The inflation report came a day after the government said wholesale prices also increased more than expected last month. Asian stocks fell for a third week, the longest stretch of losses in almost six months, as US reports on home loan delinquencies, manufacturing and prices pointed to slowing growth in the world's largest economy.

Nifty snapshot: The S&P CNX Nifty settled above the technical support level to close at 3,608.55 after sliding to a five-month low of 3,573. The Nifty opened on a strong note, gaining 16 points on Monday and 36 on Tuesday. Taking the global cues, there was a steep fall of 130 points on Thursday and another 35 on Friday. The Nifty discount to spot rose to 44 points mid-week and narrowed to 26 points at the end of the week.

OI Outlook: Open interest in the Nifty March futures moved up by four million shares to 39.5 million, as operators increased their short position with weakness persisting. The total OI in all the Nifty futures moved up by 3.88 million shares to 42.55 million shares, with operators not willing to take forward positions.

Sector analysis: Oil refining and marketing companies witnessed buying support as open interest in Essar Oil, BPCL, HPCL and IndianOil moved up with rise in prices. In the automobile segment, short position was seen in Hero Honda, Bajaj Auto, Amtek Auto and Maruti Udyog, as OI in these stocks increased with a fall in prices. Short position was seen in almost all bank stocks, except for J&K Bank. The OI in J&K Bank has increased by 8,100 shares, while the market price moved up by 2.19 per cent. Among cement stocks, the operators went short on UltraTech Cement and India Cement.

Put-call ratio: The Nifty put-call open interest is currently at 0.89 compared to 0.96 in the previous week. The Nifty call options added 28.3 lakh shares (+13%) and put options added 9.8 lakh shares (+4.8%) in OI during the week. Strong support exists near 3,500, 3,700 and 3,800 levels, as the Nifty put options hold nearly 8.13 million shares in OI at that level, representing 38 per cent of the total put OI. The Nifty was also unable to break the 3,800 level on a closing basis, as call OI has been accumulated at the 3,800 level.

FIIs in emerging markets: FIIs were net sellers in India, Philippines, South Korea and Taiwan last week, while they net bought in Thailand, Indonesia and Taiwan. The FIIs were net sellers in India for four out of five days. They bought shares worth Rs 131 crore on Monday and sold shares worth Rs 833 crore between Tuesday and Friday. Among the emerging markets, Taiwan witnessed a net outflow of $1.75 billion, while South Korea recorded a net outflow of $224 million.

FIIs to FIIs trade: The six-lakh series of the BSE and the LS series on the NSE allow FIIs to sell or buy scrips among themselves for those companies in which maximum ceiling for the overall FII investment has been attained. Simply put, when a company hits the FII ceiling, fresh buying by FIIs is capped, but one FII can always buy from another FII within the overall limit. The special counters ensure inter-FII trade.

FIIs in Derivatives: The FIIs account for 70 per cent of the share in derivatives segment at Rs 38,950 crore. During the week ended March 9, the FIIs were net sellers in F&O worth Rs 360 crore. They net sold in index futures worth Rs 642 crore and net bought index options worth Rs 285 crore. The FIIs account for 70 per cent of the total OI in F&O, with a 83 per cent share in stocks and index futures.

Stock of the Week: MindTree

Last week close: Rs 901.90; Previous week close: Rs 651.80

In what can well be described as a dream run on the bourses, MindTree Consulting rose over 38 per cent to close at Rs 901.9 as investors enthusiastically greeted the newcomer on the street.

The IT consulting and research and development services company had listed on March 7 at an over 40 per cent premium over its issue price of Rs 425 and closed the day at Rs 620.

In February, MindTree had come to the markets with an initial public offer with a price band of Rs 365-425 a share. The company, which reached the $100 million mark in 2005-06, is planning to develop a new facility in Bhubaneshwar by FY08.

Since its debut, the scrip has risen over 45 per cent and touched an all-time high of Rs 1021.8 on March 15 in intra-day trading.