Synopsis
In the case of Bank Nifty futures, traders rolled over 84% of the January contracts against the three-month average of 83%, said analysts. Traders carried forward bullish positions in state-owned banks on expectations of an increase in foreign direct investment (FDI) in the upcoming Budget. The market-wide rollover stood at 90% against the three-month average of 92%.
Mumbai: Traders carried forward fewer Nifty bets to the February derivatives series on the expiry of the January contracts on Thursday.
Nifty futures rollovers were around 75% which is lower compared to the last three month’s average rollovers of 81%, said IIFL Securities. Analysts said however the majority of the rolled over positions were bullish with the Nifty finding strong support in 16,800-17,000 levels despite the unease around the hawkish monetary policy of the US Federal Reserve, geopolitical tensions between Russia and Ukraine and caution ahead of the FY23 Union Budget next week.
“People are still holding their guard up, long-term bias will remain intact till 16,600 is held. Upside will be capped at 17,500 till FPI selling pressure is there,” said Abhilash Pagaria, head, Edelweiss Alternative and Quantitative Research. On Thursday, Nifty ended down 167.80 points or 1% at 17,110.15 after falling as much as 2.45% to 16,866.75 earlier in the day. “16,600 would be strong support going into the next series. It would be difficult for the market to cross 17,500 in the immediate term,” said Pagaria.
In the case of Bank Nifty futures, traders rolled over 84% of the January contracts against the three-month average of 83%, said analysts. Traders carried forward bullish positions in state-owned banks on expectations of an increase in foreign direct investment (FDI) in the upcoming Budget. The market-wide rollover stood at 90% against the three-month average of 92%.
“Traders have cut their positions as they are in loss and don’t want to carry forward their positions before the Budget,” said Rajesh Palviya, head-technicals and derivatives at Axis Securities. “Implied volatility has shot up because of uncertainty around global events and premiums have increased so for options traders it is risky to buy options.”
Ahead of the Union Budget in February, analysts said the Nifty put options have seen a sizeable build-up of bets at 17,000 followed by 16,500 in the Nifty options expiring February 3, suggesting the index is not expected to fall below these levels. “Nifty is holding on to the support zone of 17,000 -17,200 on a closing basis but there’s no strength as such,” said Siddarth Bhamre, director, alternative investments and research, InCred Equities. “However, it is too oversold a market at the implied volatility of 25%-plus.”
“I don’t see an immediate breakout in the Nifty but I would not short this market either because of strength in Bank Nifty. It is difficult to be negative on the Nifty if one is bullish on the Bank Nifty,” said Bhamre.
While Nifty ended the January series with a loss of 0.55%, the PSU Bank index gained 16.75%. Bank Nifty and Nifty Auto gained 8% and 7.5% respectively. The Nifty IT index slid 13.4% amid a global tech sell-off.
