Weak rollovers of Nifty 50, Bank Nifty point to shaky September

KS Badri Narayanan Chennai | Updated on August 30, 2019

Nifty 50 saw rollover of just 55%, lowest since June 2013

The markets ended the August derivative series on a weak note as both Nifty 50 and Bank Nifty indices declined further. The volatile Nifty 50 index slipped below the 11,000-mark to close the August settlement at 10,948.3.

With the government’s stimulus measures failing to lift sentiment, rollover of Nifty 50 stood at 55.22 per cent, which is the lowest since June 2013, when the rollover stood at around 50 per cent. The three-month average rollover is 72 per cent.

Similarly, Bank Nifty also saw a rollover of just 60 per cent, much lower than the last three-month average of about 80 per cent. Marketwide rollover also slowed down to about 80 per cent, from 90 per cent earlier.

The lower-than-average Nifty and Bank Nifty rollovers come amid weakness in the market due to the economic slowdown, said analysts. Most traders did not roll over long positions as they fear there will be downward pressure on the market due to weakening of the rupee against the dollar amid heavy selling by overseas investors.

Resistance at 11,200

On the options front, across-the-board short-selling was seen in Nifty out-of-the money call and put option strikes. The trading pattern in options suggests 11,200 as an immediate resistance and 10,600 as the support based on September series.

India VIX, the volatility index, which fell to 12.635 at the end of July, surged again to close at 16.42, indicating pressure on the Nifty, going ahead.

While counters such as ACC, Grasim, Apollo Tyres, Bata India and Union Bank witnessed highest rollovers, contracts on IOC, NTPC, Hindustan Unilever, Tech Mahindra and Tata Power, among others, saw the lowest rollovers.

Published on August 30, 2019

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