Trading turns lacklustre

DERIVATIVES REPORT

Trading activity on the National Stock Exchange's (NSE) derivatives segment declined sharply on Friday to its lowest level since the last few days.

A dealer with an institutional brokerage house said, "With the third-quarter earnings (October-December) season over and the interim Budget out, there are no immediate triggers for traders to build positions in the market."

He said, "Also, with elections round the corner, traders are unlikely to build major positions in the market in the coming months."

The turnover on the NSE declined sharply to Rs 12,359.40 crore on Friday from Rs 17,655.70 crore on Thursday.

Nifty futures traded below the spot Nifty in early trades. However, Nifty futures traded at par with the spot Nifty as the market recovered and short positions were covered. Nifty futures lost seven lakh shares in open interest.

The implied volatility of calls was 28 per cent while the volatility of puts was 33 per cent. Turnover in Nifty February 2004 futures declined to Rs 4,112.83 crore on Friday from Rs 6,111.33 crore on Thursday.

Nifty February 2004 futures at 1,837.20 ended at a slight premium to the spot Nifty. which closed at 1,833.65, up 29.15 points, or 1.6 per cent, over its previous close.

In a volatile trading session, dealers preferred to square up positions in pivotals like Tata Motors, Tisco, Maruti Udyog, Satyam Computer and Tata Power.

Most futures traded at a slight premium to their spot prices. Satyam February 2004 futures ended at Rs 320.90, compared to the spot closing of Rs 322.40. Larsen & Toubro witnessed some open interest movement.

The counter added four lakh shares at one point during the day. Infosys shed 30,500 shares, or 11 per cent, in open interest while Satyam shed 4.2 lakh shares, or 8 per cent, in open positions.

Oil stocks saw considerable action. HPCL shed 1.1 lakh shares and BPCL one lakh shares, or 20 per cent, in open interest. GAIL lost marginal open interest.

Bank stocks were also active. However, there was hardly any significant change in open interest. Bank of Baroda and ICICI Bank shed marginal open positions.

Among other stocks, Tisco shed substantial open interest of around seven lakh shares. Tata Motors shed three lakh shares and MTNL 2.5 lakh shares in open positions.