F&O rollover data hints Nifty could target 19,300 soon; IT, Metals may lead

FIIs continued to roll their bullish bets on Index and have slightly reduced their longs in Single Stock Futures, says Nuvama Alternative & Quantitative Research report.

The Nifty ended the June series at a record high, thanks largely to a sharp rally in the last two trading sessions. Overall bias for the month remained positive backed by aggressive buying by foreign institutional investors (FIIs).

The Nifty Index gained over 3.5 per cent to settle at 18,972, after having topped the 19,000-mark in Wednesday's (an early expiry day owing to the Bakri-Id holiday) intra-day deals. Meanwhile, the Bank Nifty too registered a fresh summit, and rallied 1.5 per cent in the June series.

For the records, FIIs net bought stocks worth Rs 20,852 crore so far in June. In May 2023, FIIs net buying stood at Rs 27,856 crore. In the F&O segment, they were net buyers of up to Rs 2,254 crore in index futures, shows NSE data.

Further, DIIs (Domestic Institutional Investors) too were net buyers in the cash segment this June at Rs 3,260 crore as against net sellers of stocks worth Rs 3,306 crore in the preceding month.

The Nifty futures rollovers rose to 76 per cent for the July series as against average 70 per cent rollovers seen in the last three monthly series. The Nifty futures will start the new series with a higher open interest (OI) base of Rs 18,900 crore as against Rs 16,900 crore in the June series. The overall market-wide rollovers were seen at par with the last three months average at 90 per cent.

According to a report on rollover analysis by Nuvama Alternative & Quantitative Research, the bulls continue to hold the grounds which are clearly reflected in rollovers and overall positioning. FIIs continue to roll their bullish bets on Index and have slightly reduced their longs in Single Stock Futures (SSF).

FIIs net longs in index futures at the start of July series stand at 56,000 contracts vs 19,000 contracts (at the start of June series). Net longs in SSF stands at 1,46,000 contracts vs 1,56,000 net long contracts (at start of June series), the report states.

Among individual stocks, few of the prominent stocks to see overall long build-up were Sun Pharma, Bharti Airtel, M&M, Maruti, HUL, Reliance, HDFC Bank and ICICI Bank. Whereas, stocks like Larsen & Toubro, Bajaj Auto, Hindalco, Tata Steel, ITC, Titan, Bajaj Finance, HDFC and NTPC among few others witnessed short covering.

The monthly July seasonality for the last ten years for Nifty is tilted towards bullishness as 8 out of 10 times, Nifty Index has settled in green with an average gain of 2.9 per cent.

The current momentum can lead the Nifty to 19,300. Bullishness can be seen in IT and Metal packs while Auto Index can see some consolidation. Banking Index may continue to remain a laggard and can be used for shorting with strict stop loss of 44,980, the report adds.

July rollovers