Disappointment Writ Large

The derivatives market lost sheen with the Hindustan Lever (HLL) and Dr Reddy's futures and option displaying weak sentiment following disappointment over HLL's results and on the news that Dr Reddy's firm suspended clinical trials for a drug licensed to Denmark's Novo Nordisk.

In the cash market, indices fell by more than two per cent to a seven-week low on Monday which led, all the three contracts in the futures segment finish lower, but at a premium to the underlying.

With just three trading days to the expiry, there was a decline in open interest position in the running series. In the August contracts, volumes spurted. The implied cost of carry turned positive for all the contracts.

Nifty July futures closed 19.70 points lower at 1,016.50 as against a loss of 23.90 points in S&P CNX Nifty at 1,012.00. August Nifty futures closed at 1,022.80 and September closed at 1,027.50. Sensex July futures closed down by 34.30 points at 3,200 while sensex in spot crashed a hefty 76.93 points at 3,153.34.

Among index options, Nifty July at 1,040 was the top traded option. July calls at 1,020 was also active. Calls at strikes 1,020 and 1,040 of the August contract were in the reckoning with players betting on a pull back in the index values in the future. August call at 1,060 was also traded heavily.

Among individual stock futures and options, Satyam, Digital and Reliance were the most active contracts. Satyam futures ended at premium to the underlying being dominant contract in the options segment with six contracts notching up the top traded slots.

The Satyam July call & put at 240 were the top traded options. Reliance call at 260 traded 160 contracts with the stock holding ground despite a weak market.