Bank Nifty futures' position build-up highest in 10 months

Bank Nifty was up 363.50 points or 2.89% at 12,947 at 13:15 hours

Traders mounted bullish positions in Bank Nifty futures on Wednesday that drove its total outstanding positions to the highest in 10 months. Analysts said the rally in bond prices, which pushed the benchmark 10-year yield to a three-year low and sparked hopes of a more aggressive monetary policy easing by the Reserve Bank of India this year, has resulted in the heightened activity in bank futures and options contracts. Investors hope the rise in government securities will boost lenders’ bond portfolio.  

Bank Nifty was up 363.50 points or 2.89% at 12,947.10 at 13:15 hours. Fortune Brokers’ technical and derivatives head, Ashish Chaturmohta, said the index has broken out of a range of 12,300-12,750, resulting in the renewed optimism.

“There is a huge build-up of long positions today which is higher than what the positions were when the index was around the same levels,” said Chaturmohta.

The open interest - the number of outstanding positions- in Bank Nifty futures is aroughly 20 lakh units. When the Bank Nifty touched 12,780 in February, the open interest was about 11 lakh.  Similarly, in December 2010, when the index touched its high of 13,267, the total open interest was 17 lakh.