Fears of delay in PSUs’ disinvestment process and nervous sentiments in the US market prevented the winning streak to continue in the fifth consecutive week. The bombing of Iraq’s territory by the US and British planes further aggravated the situation. Week-on-week basis, the S&P CNX Nifty fell by almost 1.5 per cent to close below the crucial 1,000 mark on Friday. MTNL, IPCL, VSNL, Zee Telefilms and ITC were the major losers during the week among the Nifty shares, while the old economy shares like Hero Honda, Reliance Petroleum, Reliance Industries, Asian Paints and Britannia Industries bucked the trend. Overall, out of 50 shares in Nifty index, 34 registered fall as against 16 witnessing rise. The derivative market witnessed reasonable level of trading interest as the positions continued to build up during the week. The rollover trades drove the majority of volumes in this market. The average daily turnover was nearly Rs 1,500 crore and stock futures contributed to around 64 per cent of the total turnover. Index FuturesThis segment witnessed high volumes with a total of 41,337 contracts traded during the week, a marginal increase as compared to the previous week. The outstanding positions continued to build up as the week progressed. The volatility in these contracts remained lower than the Nifty index. Despite the Nifty index remaining above the crucial 1,000 mark for most part of the week, the Nifty futures traded at discount to the cash market value, i.e. negative cost of carry. Specially, the difference was high on Thursday as compared to the other trading days. This indicates the bearish undertone prevailing in the Nifty futures market. Index OptionsThis segment witnessed substantial trading interest with a total of 8,459 contracts traded during the week, a rise of almost 21 per cent as compared to the previous week. This indicates that investors resorted to Nifty options amid rising uncertainty in the cash market. The outstanding positions built up around 1,000 level for both call and put options. Further, the implied volatility as on Friday remained around 10 per cent for Nifty call options while the same rose above 16 per cent for the put options. The put-call ratio also rose consistently during the week. This indicates that investors have rushed to buy put options to protect their investments that resulted in the firming up of the put option premium. Like the Nifty futures this segment also hints at weak market undertone. Options On Individual SharesThough the volume declined as compared to the last week, it was substantially high given the fact that the last week witnessed the expiration of August contracts. Satyam, BPCL, Reliance, Infosys and HPCL were the top traded contracts while the PSU counters, including BPCL, HPCL and MTNL, were the major volume gainers during the week. The put-call ratio, both for outstanding positions and the number of contracts traded, rose for most of the shares which indicates downward bias in the share prices. The implied volatility for put options remained high as compared to call options specially, for Satyam, HPCL and Infosys. This indicates that put options are costlier at present moment because of prevailing uncertainty. Futures On Individual SharesApart from the topline shares like Satyam, Reliance, Infosys and Digital, PSUs made their presence felt in this segment too. MTNL, HPCL and BPCL remained the major volume gainers registering a growth of more than 100 per cent in number of contracts traded. Like Nifty futures, the cost of carry remained negative for the topline shares like Satyam, Reliance, Infosys, Digital, MTNL and ITC. This indicates that there prevailed a bearish undertone for these shares in the market. This fact can also be seen in the price movement of the shares of these companies wherein except for Reliance all others have experienced a fall in the share price. The concentration of trading in few shares continues to be a concerning feature that hints at high speculation in stock futures market. The top five shares contributed to more than 70 per cent of the volumes in this segment. Outlook For FutureThe market could not sustain the gains registered in the past one month. Though political arm-twisting on PSU disinvestment is partly responsible, the main reason has been the lack of consistent support from the institutional investors. More often than not, market is remaining range bound as fence sitters pitch in as soon as the market moves either way. In the present circumstances the market would look towards the outcome of tussle between the US and Iraq and the developments at disinvestment front. It would move in a narrow range, however, a steep fall may not be ruled out in case of any adverse development on aforementioned issues. The rise from this level would be driven by the stock-specific movements. Investors in the derivative market should avoid writing options as the uncertainty level is high. Overall, the market would strive to find direction in the coming week.