The turnover in the derivatives segment was Rs 1,32,392.09 crore, the second-highest since November 26, 2009.
Combined turnover on the two major local exchanges touched a record high on Friday even as weak global cues sent benchmark indices hurtling down for the fourth day running.
At Rs 1,59,537.47 crore, the total traded volume was the highest ever.
The turnover in the derivatives segment was Rs 1,32,392.09 crore, the second-highest since November 26, 2009, when the NSE clocked Rs 1,37,130.38 crore.
“Today we saw significant shorts on index futures being created. On the options side, call writing was witnessed across levels, while puts at 5000 and 5100 shed a huge number of shares in open interest. Also, the fact that we are approaching the expiry led to heightened activity,” said Monal Desai, VP & head of institutional equities (derivatives) at Prabhudas Lilladher.
The market breadth was negative with 26 of the 30 constituents of the BSE Sensex and 41 of the 50 scrips that make up the NSE Nifty ending the day in the red.
Cues from other Asian markets and apprehensions on US President Barack Obama’s statement that banks should not be allowed to own a hedge fund or use their own money to make bets with hedge funds saw operators press sell from the word ‘go’.
In fact, the markets touched the intraday low of 16,608.09 within an hour of opening, before some short covering and value buying by domestic institutions and good results from heavyweights such as Reliance Industries, Bharti and ITC set up a recovery. All the same, barely half the lost ground could be recovered.
The benchmark Sensex closed at 16859.68, down 1.12% or 191.46 points, while the Nifty lost 58.15 points, or 1.14%, to close at 5036.
Selling was seen across sectors. All the sectoral indices on the BSE, save for FMCG and PSU, ended up to 2% lower.
Among the stocks, Tata Steel (down 3.67%), L&T (down 3.41%) and DLF (down 2.83%) were the major losers, while Bhel (up 3.26%) and ITC (up 2.13%) were among the gainers.
“Global concerns on China tightening its monetary policy and proprietary investments by banks being regulated in US are weighing on the markets. The markets as such were cautious for the last few weeks and they were waiting for a reason to fall,” said Ambareesh Baliga, vice-president, Karvy Stock Securities.
Provisional data from the Bombay Stock Exchange shows foreign institutional investors (FIIs) were net sellers to the tune of Rs 2,415.49 crore, while domestic institutions helped markets cut losses by buying shares worth Rs 1,953.97 crore.
Foreign flows have turned negative for the first time this month with net outflows for the month at Rs 192.63 crore.
Market participants see a negative bias with some more correction before buying can emerge.
“We do not foresee panic situation with 4900 levels on Nifty acting as support where we would see decent buying emerge. The rollovers are comfortable and even implied volatilities at 22-23% in options segment are normal. However, the upside seems to be capped at around 5200 levels in near term with credit policy and budgets approaching,” said Desai.
“The rally was in the last leg as markets were unable to break 5300 levels in spite of the initial good set of results. The markets have still not fully discounted any negative effect of monetary policy. Also, weak international cues may drag markets to 4800 levels,” said Baliga.
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