The Telegraph
Since 1st March, 1999
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Stock futures premium tumbles

Calcutta, Sept. 18: Premium on stock and index (Nifty) futures crashed as the equity market went into a tailspin today.

Some stocks are now trading at substantial discounts in the derivatives segment, whereas a couple of days ago most blue chip shares were quoting at 30-odd per cent premiums.

For instance, September futures of Bhel and Tata Motors are currently trading at a whopping discount of 66.68 per cent and 51.55 per cent respectively.

Most technology stocks are looking weak. Infosys, Satyam and Wipro futures are trading at 28-38 per cent discount.

Infosys is at the top with its September future trading at a 38.22 per cent discount. Satyam is quoting at a discount of 37.44 per cent and Wipro, at 28.67 per cent.

ďThe premium on stock futures crashed for the first time in many months. It clearly shows that after todayís hammering, people are not as bullish as previously. The only silver lining is foreign institutions have still not turned sellers,Ē said a senior broker.

Figures posted on Sebi, the stock market regulatorís website show foreign institutional investors were net buyers at Rs 298.6 crore ($ 65 million) today. The carnage notwithstanding, they pumped in Rs 196 crore ($ 42.6 million) on Wednesday.

The Nifty September future, however, is still trading at a small premium of 2.4 per cent. A couple of days ago, it was quoting at a premium of 28 per cent.

Though premium on most stocks crashed today, some shares are still trading at phenomenal premiums on the futures segment. September futures of ONGC, ACC, Maruti and Mahindra & Mahindra still command a hefty premium, though their spot prices have fallen. Shares of ONGC that shed more than Rs 100 over the last few trading sessions, is now trading at a 50 per cent premium on the futures segment.

Though ACCís price has fallen significantly in the cash market over the last couple of days, the premium on ACCís September future has gone up to 44.33. Marutiís September future is trading at 43.27 per cent premium, and M&Mís, at 33.52 per cent.

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