Nifty July discount widens; realty & banking stock worst hit

Tracking weak global cues, Indian stocks opened sharply lower on Tuesday. The fall can also be attributed to the high uncertainty on the political front. At 10:28 am, Nifty was trading 2.71 per cent lower at 3920 and Nifty July futures at a 57 points discount.

Nifty futures discount widened slightly from 50 points on Monday. The contract price fell 2.82 per cent while open interest added 8.75 lakh shares. Rising open interest coupled with widening discount signifies continuation of short build up in the contract. The cost of carry was -23.01.

Surprisingly, call buying was observed from strikes 3900 to 4300, and put writing at strikes 3900 to 3700. This indicates selling in cash segment by players.

Call of strike 4000 added 31,150 shares or about 1.39 per cent in open interest and 3900 added 89,000 shares or 10 per cent in open interest. On the other hand, 3900 put shed 83,000 shares or 5.87 per cent in open interest and 3800 shed 30,750 shares or 1 per cent in open interest.

In stocks futures, Reliance Industries July fell 3.73 per cent while open interest added 1.13 lakh shares. Reliance Capital July contract price dropped 4.5 per cent and open interest also shed 22,000 shares. Reliance Petroleum futures slipped 1.63 per cent while open interest added 6 lakh shares.

Renuka Sugar July skid 4 per cent while open interest added 6.75 lakh shares. Reliance Natural Resources slid 4.57 per cent and shed 1.60 lakh shares in open interest. Cairn India decreased 1.56 per cent and added 1.42 lakh shares in open interest. Essar Oil was down 3.72 per cent.

There were no gainers in banking stocks. State Bank of India plunged 5.23 per cent and the contract was trading at a discount, indicating short build up. Kotak Mahindra Bank dropped 4.47 per cent and Punjab National Bank fell 4.26 per cent.

Wipro July skid 2.81 per cent while open interest added 1.14 lakh shares, TCS slid 2.82 per cent and Moser Baer slipped 3.43 per cent.

Meanwhile, Asian stocks fell on concerns credit-market losses will widen and inflation will curb global growth.