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| World Home » Business » | Fri. May 16, 2008 |
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Nifty futures end in discount as investors go short MIL/ET/TNN, May 10, 2008. Mumbai: May 10, 2008 - Concerns over rising domestic inflation coupled with weak global cues weighed down heavily on Indian stocks on Friday. Frontline banking, realty and oil & gas stocks were the worst hit as inflation rate came in higher at 7.61 per cent for week ended April 26 against 7.57 per cent earlier. And with analysts expecting the inflation figure to touch 8 per cent in couple of weeks, it will remain a major cause of concern for the markets. Stocks in Europe and Asia slumped as AIG’s record loss and high oil prices heightened concern the credit crisis and surging commodity costs will dent corporate profits. Oil rose to above $125 per barrel on supply side concerns while dollar slipped 0.42 per cent against the euro. NSE’s 50-share Nifty closed 99 points or 1.95 per cent lower at 4982.60. The index touched a high of 5087.65 and low of 4969.40 intraday. Nifty May futures ended at a discount of 8 points against a premium of 14 points on Thursday as investors built short positions. The contract added 28 lakh in open interest while the cost of carry reduced. In options, Nifty calls of strikes 5100 and 5200 saw significant build up in open interest, suggesting stiff resistance at these levels. However, huge build up was also witnessed at 5000-4800 levels. This gives us a broad range of 4800-5200 for the Nifty. “Frontline stocks were under continuous selling pressure. Record high oil prices, weak global cues and inflation figures dragged the indices down. Today Nifty closed below the 5000 mark, which is an important psychological level for investors. If global cues remain weak one can expect Nifty to go down to 4950-4900 levels,” said Ram Kumar, an independent derivatives analyst. In stocks futures, oil & gas were the worst hit. Reliance Petroleum May contract plunged 8.8 per cent, Essar Oil skid 10.2 per cent, Cairn India dropped 1.3 per cent and Reliance Industries slipped 4.88 per cent. Formation of shorts was witnessed in banking and IT stocks. Bank Nifty futures price fell 3.4 per cent and CNX-IT futures price was down 1.57 per cent. Total F&O turnover on NSE was provisional Rs 34,951 crore, up 20 per cent from Thursday.
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