F&O rollovers to July series stay bearish

Mumbai: Traders carried forward bearish positions to the July derivatives series amid mounting concerns that aggressive policies of central banks, aimed at reining in inflation, will hurt the global economy.

Nifty rollovers stood at 75%, lower than the three-month average and market wide rollovers at 92% were in line with the three-month average, said analysts.

The Nifty has fallen 2.4% in the June series, logging a third consecutive loss, amid persistent selling by foreign investors. There is positive bias in FMCG and auto but short side bias in banks and metals, said analysts.

The indices also clocked the worst quarterly performance since the March quarter of 2020, both clocking a loss of around 9.5% during the period.
Stocks have been subject to heavy selling by overseas investors amid rate hikes by the US Federal Reserve and Mint Road, and an unabated surge in commodity prices following the Ukraine-Russia war.

Experts said the effect of these broader macro-economic woes will be felt in the quarterly earnings performances of companies.

The BSE Sensex ended flat at 53,018.94 on Thursday while the Nifty ended down 0.12% at 15,780.25.

“FPIs have sold almost $39 billion since October and unless the outflow reverses the market will continue to remain under pressure,” said Abhilash Pagaria, head of Edelweiss Alternative and Quantitative Research.

Pagaria said the cost to carry forward positions to the July series came under pressure in the last hour of Thursday’s session.

“People are carrying forward short positions. 15200 will be a good support for the Nifty and if that is broken then the Nifty may go to 14500 and on the higher side, 16250 will be the cap for the series unless FPIs return to the market,” said Pagaria.

FPIs sold Indian shares worth 1,138 crore on Thursday and domestic institutional investors bought shares worth Rs 1,378 crore, NSE data showed.