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Sanjiv Shankaran

EQUITIES weakened during the week on the heels of significant selling in the spot market. The negative sentiment among market participants showed up in the sharp decline in market indices during the course of the preceding week. The BSE Sensex ended the week at 2,908.05 points, a fall of 101.71 points (3.37 per cent) since the week ended October 18, 2002.

After a relatively firm trend in equities in early October- led largely by high profile technology stocks- the previous week witnessed jittery investors rushing to book profits. Significantly, most of the selling came on the heels of stable to improved prospects in key technology and pharmaceutical stocks. The trading pattern in the spot market suggests that investors are rather unsure about the future, and ready to sell the moment they notch limited gains.

Options: Call option positions fell out-of-the-money last week on the heels of the weak trend in the spot market. Even though frontline technology stocks did not fall as sharply as the rest, the most actively traded call option contracts fell out-of-the-money.

Satyam's October call option contract at a strike price of 220 was the most actively traded contract last week. The contract went out-of-the-money during the week in the backdrop of a volume 6,849 contracts.

Another one of Satyam's October call option contracts, the one at a strike of 230, was second in terms of trading activity. It ended the week out-of-the-money even as 4,086 contracts changed hands last week.

Reliance's share price was among the losers last week in the spot market. Consequently, Reliance's October call option contract at a strike of 240, fell out-of-the-money last week. The volume in the counter was 1,344 contracts.

Infosys' October call option contract at a strike of 3800 ended the previous week out-of-the-money. The volume here was 1,777 contracts.

Despite the fall in stocks, few of the more actively traded put option contracts ended the week in-the-money. Satyam October contract in put option at a strike price of 210 was the most actively traded put option contract. The contract was out-of-the-money. The volume was 5,092 contracts.

One of Satyam's put contract that was in-the-money was the October contract at a strike of 220. The volume was 4,681 contracts.

Reliance's October put option contract at a strike of 230 ended the week in-the-money. The volume in the counter was 714 contracts.

Futures: As always, the technology stocks dominated trading activity in single stock futures. Satyam's October contract was the most popular one with a volume of 63,176 contracts. It was followed by Infosys with a volume of 22,733 contracts and Digital GlobalSoft with a volume of 14,421 contracts. In the case of both Infosys and Digital, October contracts topped the volume list.

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