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| Edited By: N Sundaresha Subramanian |Source: |Updated: Sep 15, 2017, 01:50 AM IST
- January series is the longest, ending on Jan 31
- Expectations over Q3 results, budget create longs
- Nifty major hurdle seen at 6160-6172 levels, passing which 6,250 will be the level to cross
MUMBAI: Marketwide rollovers in December were a tad lower than the 85% seen in November, but they remained high at 82.3%.
Nifty index contract rollovers were much lower at 75.7%. Seventeen single-stock futures saw rollovers in excess of 90% (see table), and Bank of Baroda led the heap with 96%.
Nifty Jan futures 6120 closed at a 38-point premium to spot close of 6081 points.
Akash Dharia, derivatives analyst with CLSA Asia Pacific Markets, in a report on Thursday said one peculiar thing that was seen during the rolls was that in the last two sessions, the mid-month contracts (January series) were quoting at a premium, while the near month contracts(December) were quoting at a discount.
“This means long rollers made money and short rollers didn’t. This happened because of more people were buying into next month’s contracts,” he said.
Nifty Junior contract saw rolls in excess of 94%. This is an indication that the midcap rally could extend for a few more days, said Dharia.
The Nifty January series contract, which was quoting at a discount till Wednesday, also turned into premium on Thursday.
This acted as a dampener preventing heavy rolls. Nifty added only around 2% to overnight rolls, most of the action was stock specific. Even in the stock futures, cost of carry was a problem, says a derivatives trader with a local brokerage.
“Also, the open interest was in excess of 1 lakh crore. The new series is expected to start with open interest of around 80,000, which is very high. Some traders took this as a sign for stagnant markets and allowed their positions to expire,” he adds.
Traders said a number of long positions were being rolled into the new series. “People are adding long positions ahead of the Q3 results and expectations from the Union Budget,” said Suresh Kumar Iyer of Asit c Mehta Securities.
Iyer said high expectations along with the longer nature of the January series (The new contract will end on January 31) has pushed up the cost of carry.
“In more than 50% of the stock futures cost of carry was at a high range of 2.75%-3%. Despite this people are taking positions,” added Suresh. He feels the Nifty will face a major hurdle at around 6160-6172 levels. After passing this there could be some resistance at 6250 levels again.
