Bourses remain range-bound

Anup Menon

OVERALL Trends: The cash market continued to remain range-bound during the course of the week. On a week-on-week basis, the BSE Sensex closed the week at 3052.60, up by around 1 per cent over previous week's close. The trends at the National Stock Exchange were in line with that of the cash market.

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The S&P CNX Nifty closed the week at 997.60 points up by around 1.5 per cent over previous week's close. The trends in the futures market were divergent. For instance the near month futures contract at the BSE closed the week down by around 0.4 per cent. In contrast the near-month futures contract on the Nifty closed the week up by around 2.8 per cent over previous week's close.

Trading Statistics: Volumes in the futures market as a whole showed some signs of improvement during the week.

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At the BSE, volumes improved by around 38 per cent from around 6,510 contracts to around 8,975 contracts. In the same time frame volumes at the NSE also registered a marginal improvement by around 3 per cent to 30,685 contracts as compared to 29,694 contracts traded the week before.

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Nifty November: The Nifty November contract now trades in the one-month trading range. During the week volumes improved by around 13 per cent to 26,648 contracts as compared to 23,316 contracts traded the week before. As recommended in the previous week, long positions taken during the week could have been closed out profitably. The valuation of the contract based on the last day of trading provides some scope for trading profits. The implied cost of carry-on-the-contract based on the last day of trading works out to a negative 21 per cent. Fresh long positions can be considered at current levels.

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Nifty December: The Nifty December now moves into the two-month trading range. Trading volumes in the contract declined during the course of the week. Total volumes declined by around 54 per cent to 3,521 contracts as compared to 7,717 contracts traded the week before. As indicated in the previous week investors with a long position could have closed it profitably. The valuation of the contract, based on the last day of trading, provides some scope for trading profits. The implied cost of carry-on-the-contract works out to a negative 9 per cent. Fresh long positions can be considered at current levels.

Nifty January: The Nifty January is the longest maturity contract in the Nifty family. As one can expect traded volumes in the contract was subdued. Around 516 contracts were traded during the week as against 1,219 contracts traded the week before. Given the lower level of liquidity, fresh positions need not be considered at current levels.

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Sensex November: The Sensex November contract is now trading in the one-month trading range. Volumes in the contract declined by around 23 per cent to 4,575 contracts as compared to 5,930 contracts traded the week before. The valuation of the contract, based on the last day of trading, provides some scope for trading profits. The implied cost of carry-on-the-contract works out to a negative 19 per cent. Fresh long positions can be considered at current levels.

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Sensex December: The Sensex December contract is now trading in the two-month range. Volumes in the contract improved during the week by around 148 per cent to around 2,750 contracts as compared to 1,110 stocks traded during the week before. The valuation of the contract, based on the last day of trading, does not provide much scope for trading profits. The implied cost of carry-on-the-contract works out to around 8.5 per cent. Fresh positions need not be considered at current levels.

Sensex January: The Sensex January contract is the longest maturity contract in the Sensex family. Volumes in the contract improved from around 420 contracts to around 1,650 contracts. Given the low level of liquidity in the contract fresh positions need not be considered at current levels.