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Nifty Oct futures at 33 pts premium, range 3600-3700

Posted by Yogesh on Tuesday, 7 October, 2008

MUMBAI: In a topsy-turvy trade on Tuesday, Nifty managed to close in the green while Sensex ended 106 points lower. National Stock Exchange’s 50-share index gained 0.12 per cent to end at 3606.60 and Nifty October futures provisionally settled at 33 points premium.

The contract price gained 0.4 per cent and open interest added 34.35 lakh shares. In spite of short covering in the early trade, the sell side quantity is still heavier than buy side indicating players have gone short at higher levels.

The global economic and credit conditions are pushing the markets deeper into a bear trap. Call selling was observed at strikes 3700, 3800 and 3900 while call buying was seen at strike 3600. On other hand, put buying was observed at 3700 while put selling at 3600. This points to Nifty range of 3600-3650/3700 barring any extraordinary development in global markets.

The top Nifty gainers were National Aluminum Co (9.79%), Steel Authority of India (4.89%), Zee Ltd (4.81%), NTPC (4.75%) and Ranbaxy (3.75%).

Top losers were Larson & Toubro (-7%), TCS (-6.96%), Siemens (-6.96%), Sterlite (-6.48%) and HDFC Bank (-6.14%).

On the sector front, IT and capital goods were the most beaten down. Despite rupee touching to 48 levels against dollar, IT companies felt the heat with the credit crisis spreading to European countries – where Indian IT companies are diversifying after the US sub-prime.

“Markets continued to show weakness with heightened volatility. The downside still persists. However, any recovery from these levels will have decent recovery. Given this scenario, traders need to be cautious. One can create a strategy of long straddle with 3600 call and 3600 put. These costs total premium of Rs 322. Profits will arise any levels above 3960 and below 3240,” said Ankit Sinha, CEO-Spark Advisory.

On stock futures front, Reliance Capital October advanced 2.54 per cent, Reliance Industries contract gained 2.2 per cent and Reliance Petroleum near month jumped 3 per cent on short covering.

ICICI Bank futures slipped 0.35 per cent, State Bank of India dropped 1.3 per cent and HDFC Bank fell 6.42 per cent.

Tata Steel gained 2.66 per cent, BHEL advanced 3.55 per cent and DLF rose 1.2 per cent.

Total F&O turnover on NSE was Rs 59,767 crore, up 27.5 per cent from Monday. Source The Economic Times

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