Maintain caution at higher levels

Profit booking at higher levels snapped the ongoing rally, with the BSE Sensex closing at 17,773, off its days’ high of 17,979 and the S&P Nifty closing at 5,185.85 compared with the intra-day high of 5,248.55. Of the 30 Sensex stocks, 7 advanced and 23 declined. In the case of Nifty, 16 advanced and 33 declined.

According to market sources, Friday’s profit booking was triggered by an article in New York Times on burgeoning valuations of Reliance Industries, DLF and Bharti Airtel.

However, Reliance Industries made handsome gains and closed at Rs 2484, up 2.53 per cent. Bharti Airtel too closed 3.32 per cent higher at 993.05. DLF, however, closed at Rs 851.70, down 1.24 per cent.

The Nifty October futures traded at a premium of eight points for a while, before closing at 5172, a discount of 12 points.

The open interest in Nifty October futures has increased by 20.8 lakh shares to 344.5 lakh shares. The increase in OI and Nifty futures discount suggests short positions at higher levels.

The Putall ratio of open interest in Nifty options moved up further to 1.44 from the previous day’s level of 1.35. The Nifty Put Options added OI of 16.04 lakh shares, while Nifty Call Options added 2.25 lakh shares in open interest.

The out-of-the-money Call writers squared off their transactions at a profit. The Nifty 5200 call options open interest declined by 45,000 shares as its premium declined from the day’s high of Rs 194 to close at 141.

The 5,100 call options too witnessed a decline in OI by 84,550 shares as its premium declined from a high of Rs 263 to Rs 195.25