MIXED signals from Beijing on the airport project saw the market trade erratically early yesterday. The trading range was between 9,485 and 9,550. In the afternoon, a surge in buying took the August future through 9,600. The high of the day was 9,685. At the close, the contract was at 9,675, up 225 points and a premium over the cash of 57 points. Volume amounted to 14,000 contracts. The September contract rose 240 points to 9,680. Index option activity was thin with 900 lots traded. Jardine Fleming said overseas bears sold August 9,600 calls while others bought September/December 10,000 call time spreads to try and capture the expected rise in volatility in the autumn. Last autumn, volatility was well over 30 per cent and at times stayed for extensive periods in the high 40s. Yesterday, front month implied volatility slumped to 27 per cent, its lowest level in months. Confirmed open interest on Tuesday in futures was 33,604 contracts in August and 877 contracts in September. In options, the overall open interest was 36,327 lots. Uncertainty regarding market direction continues to prevail. Concern with United States interest rates remains a key element undermining positive sentiment.