Index futures rise as investors move in

STRONG institutional and retail buying in heavy trading took Hang Seng Index cash and futures on a rally through 9,500 yesterday.

The cash index leapt 276.65 to 9,631, while May was up 245 points to 9,660, a 29-point premium.

June was up 255 points to 9,670.

Futures turnover was 18,634 lots, with 15,765 in May and 2,758 in June.

Roll-over activity continued to creep in, with dealers expecting next week to be a major period of trading in this area as May closes.

Open interest was 31,257 contracts in May and 2,556 in June.


Jardine Fleming (JF) said: ''Lack of progress in the airport financing talks did not seem to disappoint the investors too much.'' Index options saw more conservative trading, said the brokerage, with buying of May 8,800 and 9,000 puts.

''Others sold May 9,600 calls to capture premium under rising implied volatilities,'' said JF.

Implied volatility in the front month was at 35 per cent. Historic 100-day Hang Seng Index volatility was around 41 per cent.

Activity in options volume was moderate at 2,262 lots and the open interest rose to 38,024.


At the money implied volatility in calls and puts in June were both 36 per cent. In September, they were 33 per cent and 34 per cent respectively.