F&O expiry shows caution ahead of Q4 results

Mumbai, Mar 29 | Updated: Mar 30 2007, 07:17am hrs
The expiry of the derivative contracts for the March series was over amid high volatility in the market.

The roll-over of positions in the derivative contract from March to April series is particularly important as it is ahead of the forthcoming fourth quarter results of India Inc.

This rollover is also on the background of rupee appreciating strongly against the dollar, affecting the prospects of most of the information technology (IT) sector companies.

Siddarth Bhamre, derivative analyst, Angel Broking, said, Nifty futures witnessed a rollover of around 65% in which most of the short positions were rolled over.

Investors are taking a cautious approach and the market is witnessing stock specific action, where some stocks have witnessed good amount of rollovers. We would definitely advise clients to go short at every rise of Nifty to 3,850 or 3,900 levels.

The market wide open interest (OI) this time was very less when compared to previous month. The market wide OI as on Thursday's close was Rs 14,000 crore for Nifty futures and Rs 22,000 crore stock futures, which together comes to only Rs 36,000 crore which in the previous month was pegged at Rs 44,000 crore. Nifty futures witnessed a roll-over around 65% from March series to April Series while Stock futures witnessed a roll over of around 65-70%.

An interesting trend observed in the market as per the market analysts, is that very few fresh positions have been created and whoever has rolled over their positions have been carrying them for quite a long time.

Retail traders are virtually absent from the market. This proves the fact that investors taking a very cautious approach ahead of the fourth quarter results of corporate India.

Somendra Agarwal, derivative analyst, Religare Securities, said, Investors are taking a cautious stand ahead of the fourth quarter results of India Inc. It seems that the market will stabilize in the coming trading sessions and would trade in the range between 3,700-4,100 levels.