Stock markets last week

Domestic market
The Nifty closed at a new high on Monday of 4261 points. After three days of staying steady, the markets corrected on Thursday and early trading on Friday to recover later. For the week, the Sensex gained 0.24 per cent. The Nifty gained 0.8 per cent. The BSE 100, BSE 200, BSE 500, the Midcap and the Smallcap gained more than the Sensex.

Nifty snapshot
The Nifty future traded at a marginal premium on Monday. Tuesday's marginal discount turned to 6.75 points on Wednesday as the cash Nifty fell 32 points. On Thursday, though the cash Nifty tumbled 41 points, the discount on the future reduced. On Friday, the all-round bullish sentiment resulted in the Nifty future once again trading at a 12.5 point premium.

Open interest outlook
The Nifty futures open interest will go into the last week of settlement with a 16 per cent increase of 53 lakh shares to 38 million shares. In the last week, there was a decline of 43 lakh shares. Trading activity was also quite high for the last three days of the week.

Market position
OI in futures & options contracts on a stock is capped at 20 per cent of the free-float holding. If OI position hits over 95 per cent of MWPL (market wide position limit), fresh OI is restricted, and the underlying stock can only be bought in cash markets or from a seller in the derivatives market.

Sector analysis
Among sector indices, the Bankex, which has had a phenomenal run in the previous two weeks, declined 1.8 per cent last week, and was the biggest loser with the largest decline in open interest. The auto and consumer durable indices also fell. The biggest gainer was the Capital Goods index as there is new bullishness about the sector, buoyed by strong results. The other gainers in price include Metals and FMCG. In terms of open interest, the highest position was added in paper, others and shipping, while fertilisers saw the largest decline. In stocks, open interest increased the most in Chennai Petroleum.

Put-call ratio
On Monday, the Nifty open interest put-call ratio had gone up to 1.53, but it reduced through the week to end on Friday at 1.44. Last week it had gone up from 1.14 to 1.46. The stock put-call ratio stayed at 0.23, the same level as previous week.

FIIs investment in emerging markets
Overseas investors were buyers across the eight Asian markets during the week as they invested $3.3 billion dollars. Japan attracted investments to the tune of $1.8 billion, followed by $406 million in South Korea. In India, according to the provisional figures provided by BSE and NSE, FIIs invested $350 million. Taiwan and Thailand attracted $297.5 million and $276.6 million respectively.

FIIs in Derivatives
Total gross open interest position of FIIs stood at Rs 44,227 crore on May 25 as compared with Rs 38,382 crore a week earlier. As on May 25, the FIIs were holding 7.37 lakh contracts of index futures and 7.31 lakh contracts of stocks futures. In index options, they held 3.87 lakh contracts.

FIIs to FIIs trade
The six-lakh series on 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.

Global markets
In the world markets, China continues to be on a roll despite warnings from the Chinese regulatory authorities and even Alan Greenspan. Yet again last week, the Shanghai Composite closed at a new high, gaining 3.7 per cent over previous Friday.

But that was not the case in other emerging markets, which didn't have a common pattern. Russia declined 3.34 per cent. Pakistan gained 3.2 per cent and South Korea was up 2 per cent. However, Hong Kong and Malaysia declined over 1 per cent. In developed markets, the FTSE lost one per cent.

STOCK OF THE WEEK: Raj Television Last week's close (Rs) 333.18 Prev. week's close (Rs) 248.43 Raj TV, the closest competitor of Sun TV, put up a stellar show as it leaped by 29 per cent to close at Rs 320 after touching 52-week or an all-time high level of Rs 332 on Thursday. The company launched two new channels, of which one will be named Kalaignar TV in honour of DMK patriarch and Tamil Nadu Chief Minister M Karunanidhi.

According to a dealer, the heightened interest in media stocks is also one of the reasons for the exorbitant rise in the share price of the company. Meanwhile, the company has also performed well financially, with profits growing a stupendous 200 per cent year-on-year though revenues grew a modest 14 per cent. The stock has leap-frogged by a whopping 70 per cent in the last one month.