Traders were able to carry forward their bullish bets on the Nifty towards the January series on expiration of the December contracts last week with their apprehensions regarding the heightened instability in the market slowly dwindling.
However, the extent of the rollover in the futures by Nifty of the January series was much lower than the previous expiry which is indicative that the market participation was in the sombre mood by next year until foreign institutional investors return with brand new allocations.
The rollover this month’s future of the Nifty to January was at an estimated 68 % against 72 % during the November series expiry. Total open interest in the index contracts which include those of January and February series.
The excitement that surrounded the rollover was unaccounted for thought there was a rollover of long positions as there were few fresh positions. Expectations about range-bound market movement in the Nifty based on options prices fell to 14.88, the lowest since the 2nd quarter signaling option traders not to anticipate brisk movement or a decline in the markets in the nearing period.
The comfort level in the market has drastically gone up after the events such as the U.S. Federal Reserve’s plan to start with the tapering and the RBI’s decision to maintain interest rates unchanged.
The Fed forewarned the apprehension or a start of a rollback of its stimulus yet the global markets took the news relatively on a light note. FIIs continued their purchases of Indian stocks which were also relieved that the ECB did not raise policy rates as opposed to expectations.
However, analysts expected the Nifty to push forward with their trading in the range of 6,100-6,400 levels over the next couple of weeks with the Index closing at 6, 278.90 late last week. When the Nifty reaches the 6,400 levels there will be an undoing of long positions.
Rollover across futures contracts which include stocks and indices in the January series which was up 77 % against the three-month average of 75 %. In stock futures, the rollover to the 1st quarter was around 81 % against the three-month average of 79 %. Experts predict that traders carried forward more positions in their respective stock futures mainly because of the rally in mid-cap stocks.