Rumours take its toll… - Views on News from Equitymaster

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Rumours take its toll…

Mar 24, 2001

Rumours take its toll…

Contract Open
price
Day’s
high
Day’s
low
Last traded
price
Volume (no of
contracts traded)
Value
(Rs m)
Open interest
(no. of units)
Days to
expiry
29-Mar-01 1,200 1,200 1,135 1,160 772 180 1,925 6
26-Apr-01 1,186 1,199 1,150 1,166 692 164 1,608 32
31-May-01 1,195 1,210 1,150 1,178 34 8 103 62
Total         1,498 351.4 3,636  
Nifty 1,163 (down 21 points)

Cash market:
The market plunged down following the raids by income tax authorities at leading stockbrokers. Adding to the fall of the indices was the rumours of profit warning by the IT major Infosys. At lower levels, buying by institutions helped the indices to recover. Volumes on the bourses however remained low. Nifty closed at 1,163, a decline of 2.2%.

Derivative market:
Volumes shot up sharply by more than 300% on the futures bourses. As normal markets tumbled down, traders took fresh positions in the futures. The reason could be the fact that the futures markets do not have any upfront or carry forward margins, which is not the case on the normal market. It seems market has discounted all the news as volumes were slightly better.

March series:
Generally when the contract nears to its expiry, open interest starts coming down. Volume increased along with decrease in the open interest position. Carrying cost continued to be negative as futures are trading at discount to market. All the parameters indicate closing of positions.

April series:
Volume has started building up in this series as March series is nearing to expiry. Open interest position increased by 339 contracts.

May series:
Volumes were lackluster in this series as players are unable to make a call on May series.

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