F&O Update: 5 key takeaways from monthly rollovers to July series

The Nifty on Tuesday ended June futures & options (F&O) series on a rather tepid note, despite repeated attempts at reclaiming the 24,000-mark. The Nifty June series eventually ended with a notional loss of 0.2 per cent at 23,865. This was the second straight series where the Nifty ended in red.  Today, Wednesday July 1, Nifty futures started trade on a positive note, gaining 0.4 per cent at 24,100 levels. The current month futures command a 90-point premium to the spot Nifty value.  Analysts at Axis Securities believe Nifty's strong June rollovers suggest a likely bullish conviction for the July series.  "Nifty's robust 80.3 per cent June rollover eclipsed the previous 70 per cent and both three- and six-month averages, signalling strong long formations and bullish conviction entering July," said the brokerage firm in its monthly rollover report. 

Here are the 5 key takeaways from Axis Securities monthly rollover report.

  Nifty futures: July rollover costs surged significantly expanding to 0.62 per cent from 0.28 per cent for Nifty, illustrating aggressive bullish financing appetites.  The July derivatives series is projected to consolidate within a 23,000–24,500 trading band. Options data reveals formidable Call resistance between 24,500–25,000, offset by robust Put support anchoring the 23,000–23,500 zones. Meanwhile, intense bilateral open interest establishes the 24,000 strike as the critical directional pivot.  Bank Nifty: Bank Nifty posted a 77.2 per cent transition rate, beating the prior expiry and its half-yearly mean. However, trailing the quarterly benchmark implies measured optimism. The July rollover costs expanding to 0.80 per cent from 0.67 per cent.  Bank Nifty futures commenced July with 23.5 lakh shares, shedding 1.8 lakh during a fierce 4.4 per cent price rally, strongly signifying resilient bullishness via aggressive short-covering.  FIIs: Foreign Institutional Investors (FIIs) futures long ratio fell to 0.10 from 0.17 last expiry, signalling a cautiously positive outlook.  FIIs unwound 4,759 index longs while massively added 98,786 shorts. This skewed positioning reflects a deteriorating risk appetite, indicating a willingness to build fresh bearish exposure rather than focusing solely on upside potential amid the on-going market volatility, stated the report.  Stocks with increased open interest (OI): Crompton Greaves, SAIL, JSW Steel, Dalmia Bharat, and Godrej Consumer Products.  Stocks with decreased OI: Jubilant FoodWorks, Alkem Laboratories, InterGlobe Aviation, Indus Towers, and Hyundai.  Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Reader's discretion is advised.