Derivative analysts expect the Nifty to surpass 11,750 in the September series but cautioned that as per historical trends, indices tend to weaken after rising for three straight series. Nifty logged in the third consecutive series of gains in the August derivatives series. Nifty gained 4.1 per cent during the August series and Bank Nifty gained 9 per cent.
“The rollover aggression has been on the bulls side. Volatility has been cooling off for five series now and is below 20,” said Chandan Taparia, derivative analyst at Motilal Oswal. “However, markets generally decline after rising for three consecutive expiries,” said Taparia.
Indian stock indices have gained more than 50 per cent from their calendar-year lows hit on March 24 thanks to the liquidity coming to emerging markets and outperformance by select heavyweight stocks, even as the number of coronavirus cases in the countries have multiplied sharply.
Derivative analysts said rollovers in Nifty and Bank Nifty futures were over 75 per cent, according to provisional numbers.
The auto sector saw 82 per cent rollover while cement saw 87 per cent rollovers.
Analysts also said that Bank Nifty has underperformed for some time but it has regained momentum as the Indian central bank decided not to extend moratorium beyond August.
Rajesh Palviya, head – technicals and derivatives at Axis Securities said that when the market is ‘light’ on short positions, like it is now, then the market tends to take a breather.
“As the market is light in terms of short positions then we can see a pause. We expect Bank Nifty to outperform but Nifty could come off,” said Palviya.