Count on index heavyweights

F&O OUTLOOK

Bulls tamed the bears on Friday, riding on a strong rally in index heavyweights. The Nifty spot closed at an all-time high of 6,274. Nifty futures too closed at a life's high of 6,264, albeit with a discount of 10 points. The open interest in January futures contracts rose by 33,440 contracts on account of fresh long positions.

Friday's rally was attributed to fresh buying and short covering in index heavyweight such as Reliance Industries, Larsen & Toubro, ICICI Bank and ONGC.

After opening at 2,940, Reliance Industries futures went up by 2.80 per cent to close above Rs 3,000. A total of 1.43 lakh contracts were traded (up 59 per cent).

The open interest declined by 345 contracts, indicating short covering. ONGC rose by two per cent and 2.73 lakh shares were bought. L&T rose 3.74 per cent due to short covering, as January futures open interest declined by 20,000 shares.

There was short selling in cement and auto stocks. The futures of ACC, Grasim, Ambuja Cement, M&M, Maruti Udyog and Tata Motors declined by over one per cent each, accompanied by an increase in open interest.

IT heavyweights such as Infosys, TCS, Satyam and Wipro have seen short positions lately. Rising crude and gold prices and resultant weakening of the US dollar were the culprits, according to a derivative analyst at Angel Broking.

The banned stock futures, including Aptech, Arvind Mills, Bongaigaon, Essar Oil, Hind Exploration and JP Hydro, declined by around two to five per cent due to offsetting of positions.