BUOYANT trading in Hang Seng Index futures greeted the New Year, with the January contract maintaining a 100-point premium over the cash. The contract opened strongly at 10,160 against the 10,140 close on Friday ahead of the New Year bank holiday break. In brisk but relatively modest trading, the contract jumped to 10,260, a level it held until near the close of trading. Jardine Fleming said overseas buy orders in the afternoon took the contract higher. It closed the day at a high of 10,318, up 178 points on the day and 114 points up on the cash. February closed up 180 points at 10,360, a premium over the cash of 156 points. Turnover overall was 12,923 contracts. This was split with 11,900 contracts in January and 1,023 contracts in February. The strong open interest in February on its first effective day of trading indicates bull sentiment towards the emergence of a Chinese New Year rally is relatively strong. In index options, local bears bought January 10,000 puts while others traded February 9,800/10,600 risk reversals, JF said. Front-month implied volatility was down marginally at 16.25 per cent. There were 3,337 lots traded in all. Open interest on Friday was 31,619 contracts in January and three contracts in February. In March, there were 301 contracts and in June there were 1,662 contracts. Bull sentiment has been present since the second week of January. There are some pretty confident local traders convinced 10,500 is going to be the close at the end of January and 11,500 will be broken by the end of February. Sentiment was helped by the relaxation of sales arrangements in residential flat complexes. The changes to pre-sale, deposit payment and balloting arrangements were not regarded as substantive by analysts. However this, on the back with the 25-basis point cut in local interest rates was a big tonic for sentiment. Yesterday's decline and the prevalent low level of implied volatility is reflecting the heavy off-setting activity of some bulls. Therefore it should not be read as a yardstick of overall market sentiment.