Rising rollovers, open interest indicate bullish market ahead

Mumbai, Nov 28 | Updated: Nov 29 2006, 08:03am hrs
Though the Sensex has taken a brief break from its consistent north-bound journey on Tuesday, the market-wide open interest (OI) on the derivatives segment of the National Stock Exchange (NSE) continued to move upwards surpassing its all time high level achieved in April, 2006.

The current market-wide open interest (OI) in individual stock futures on Tuesday stood at a massive 173.54 crore shares compared to 153.64 crore shares reported on D2 of October expiry (twodays ahead of October contract expiry) of the previous month showing an increase by nearly 13%. In case of Index (Nifty) futures, the OI has increased to 3.70 crore contracts, a rise of 32% from the previous level of 2.79 crore contracts.

Interestingly, the build up of open position in individual stock futures could be witnessed across the sectors. Some of the stocks which have found favour with investors in the derivatives segment are Indian Hotels, whose current OI stood at 1.02 crore shares compared to 12 lakh shares last month, a gain of 757.10%. It is followed by electronics major Siemens gaining 401.37% to have a current OI of 68.66 lakhs shares. Sun TV has gained by 335.45% to have an OI of 7.8 lakhs share while Patni Computers OI has rose by 163.16% to reach at 10.4 lakhs shares. OI in GMR Infra and Reliance Communications have also risen by 110.51% and 106.97% respectively.

Analysts are of the view that the increasing buildup of OI could be attributed to the fact that the Indian market is looking quite attractive with lot of liquidity and fresh funds freely flowing in, which has made the market fundamentally strong.