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Rollover of open interest positions for Nifty-50 Futures to February series has slipped to 55 per cent, as weak hands preferred to stay away from the market ahead of the Budget. The Union Budget 2020 will be presented on Saturday (February 1). The rollover of Nifty contracts during the last three occasions stood at above 65 per cent.
Though Bank Nifty Futures witnessed a better rollover of open positions around 61 per cent, though it is still sharply down when compared with three previous months.
According to analysts, a number of retail investors allowed their open positions to expire on Thursday, and turned to wait-and-watch mode, as the Union Budget is round the corner.
India VIX witnessed a sharp recovery in this series as it spiked by 51 per cent from 11.12 to 16.79 levels, said Motilal Oswal Securities. Volatility is inching higher after the decline of the last five series.
“Higher volatility is because of the upcoming Budget 2020, geopolitical concerns and corporate earning seasons,” said Chandan Taparia, Equity Derivatives and Technical Analyst, Motilal Oswal Financial Services. The VIX has to cool down below 13, post the event, he said. Then only stability will return to the market, he added.
FIIs’ total positions in index futures doubled during the month of January; they have reduced their long positions by 20 per cent while short positions were increased by 46 per cent, said Emkay Global Financial Services. Even in stock futures, they have added 28 per cent on the short side while a small addition of 5 per cent was seen on the long side, it added.
F&O universe shrinks
The universe of derivatives now shrinks further with four more stocks going out of the F&O segment.
Futures contracts will not be available in Castrol, Dish TV, NBCC and Tata Motors DVR.
FIIs’ net cash flow has turned negative for January after three consecutive months of positive inflows, it added.
Stock-wise positive data set-up is seen in Pidilite Industries, IGL, MGL, Britannia, Divi’s Laboratories, Escorts, JubilantFoods, L&T, Muthoot Finance, PVR, and SRF, among others, said Motilal Oswal.
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