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The Nifty and Bank Nifty index, two of the largest derivative contracts, have witnessed a massive built-up of derivative positions.
Data from quant funds show that 20.72 per cent of the open interest (OI) was added on Tuesday when the July month Bank Nifty futures index rose nearly 1.4 per cent to close at 22,538. The total OI in Bank Nifty index stood at 16,60,500 or ₹3,741 crore.
The Nifty index, which rose 0.33 per cent to close at 10,754, saw an 8 per cent jump in its OI built up. The Nifty index has an OI of 1,35,30,150 or ₹14,550 crore as on closing price of the index on Tuesday.
The OI in both the indices has nearly doubled from around May end. On Tuesday, the combined OI stood at around ₹18,300 crore. The total stock futures OI is now close to ₹1 lakh crore, data shows.
“Even the last bear standing in the markets now seems to have turned bullish as index OI is witnessing massive spike and taking up the markets with it,” said a derivative analyst at a Mumbai-based quant fund.
The stock market rally this week can be largely attributed to change in global market sentiments as markets in China witnessed a sharp jump on Monday. The Shanghai Composite index rose by a sharp 6 per cent, its largest single day gain in nearly a year. In the US, the Dow Jones, Nasdaq and S&P indices too rose between 1.5 and 2.5 per cent.
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