Bank Nifty September rollover lower than 3-month average; underperformance may continue in new series

Stock market trend

Benchmark Indian equity indices were trading flat on 29 August amid ongoing market volatility. Nifty was trading at 24,088 in the afternoon, near its all-time high hit in the previous day’s trading. Bank Nifty was up 100 points or 0.21 percent at 51,249.

Bank Nifty's final rollover data for the previous day shows a rollover rate of 68 percent, which is lower than the three-month average of 72 percent. The September 2024 series begins with 2.23 million shares, down from 2.41 million shares in the previous series.

According to Soni Patnaik, Assistant Vice President of Derivative Research at JM Financial, “Bank Nifty starts the September 2024 series with highest open interest at the 51,000 Put Option with 94,000 contracts; and at the 51,500 Call option with 112,000 contracts.”

Patnaik further noted, “A weekly close above 51,300 for Bank Nifty is crucial to confirm a potential test of the 52,000 level. Any break below the 51,000 mark on a weekly closing would signal weakness for the series. Bank Nifty may continue to underperform in the September series.”

Nifty rollover analysis

For the Nifty 50, with the monthly expiry due today, the rollovers stand at 62 percent, with a rollover cost of 0.5 percent. This is significantly higher than 49 percent at the same time in the previous series. “As of yesterday, long positions have been taken in Nifty based on rollover data. The 25,000 level is forming a base for the September series, followed by crucial support at 24,800,” said Patnaik.

Patnaik also pointed out that the next resistance levels for Nifty are around 25,250, followed by 25,400. The final rollover summary later today is expected to provide a clearer picture of the September series.

Foreign Institutional Investors (FIIs) positioning

Foreign Institutional Investors maintain a range-bound outlook for the indices, with a slightly negative bias for Futures and Options (FnO) stocks. The Long-Short Ratio stands at 62 percent to 38 percent, with the India Volatility Index (VIX) at 13.95.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.