Gold Silver Reports — Traders Roll Over Fewer Bets as Indo-Pak Tension Escalates — Traders carried forward fewer stock and index futures contracts to the October series on expiry of the September contracts on Thursday owing to growing IndiaPakistan tensions and rich share valuations. While bullish bets were squared off amid the sell-off on Thursday , a sizeable portion of the rolled over contracts were short posi tions as the Volatility Index (VIX)traders’ perception of near-term market risks based on Nifty options premiums–soared 33%–its biggest surge in a day since August 24 2015.
Rollover of all stock and futures positions stood at 75%, lower than the average of 79% in the last three derivatives expiries. Nifty futures rollover stood at 66%, lower than the average rollovers of 75% in the last three series.
“Rollovers were low because market has run up sharply without any major corrections, India-Pakistan geopolitical tensions and the upcoming RBI policy . That is why people chose to wait and again build up of positions will happen once there is stability in the market,“ Chandan Taparia, derivative analyst, Anand Rathi Securities.
The October series will start with market-wide futures open interest of Rs 95,700 crore compared to Rs 1,00,000 crore at the start of the September expiry . The Nifty futures roll cost stood at 52 basis points, down from 58 basis points on Wednesday . Analysts expect the VIX to rise further in the coming days as the market is on the edge Chandan Taparia, derivative analyst at Anand Rathi said the VIX may rise to 21 level in the next few sessions. “The fear gauge is unlikely to see the kind of sharp rise that was seen on Thursday but will remain elevated given the key events lined up in the next few weeks,“ said Sahaj Agrawal, associate vice-president, derivatives at Kotak Securities. “The sharp rise in VIX indicates that the market sentiment is shaky and uncertain for now“.
Among sectors, long rollovers were seen in metal, information technology and cement companies while short rollovers were seen in banks and automobile firms. Derivatives analysts expect the sell-off to deepen if the Nifty falls below a crucial support of 8500. On Thursday , the index ended down 1.8% at 8591.25. — Neal Bhai Reports