High roll-overs indicate budget to be next trigger for the market

Written by Markets Bureau | Mumbai, Feb 28 | Updated: Feb 29 2008, 05:12am hrs
As the capital markets took a wait-and-watch approach ahead of the Union Budget due on Friday, the roll-overs for the February series to the March series which started picking up in the last week saw some robust figures. The markets wide roll-overs stood at around 82-83% while that for Nifty futures stood at around 85%.

Experts believe that these figures are greater than the last three months average of 76-77%, as retail as well as institutional investors who did not wish to book profits at a lower level after the meltdown, carried their long position to the next month.

The higher rate of roll-over of positions also indicates that market players are expecting some positive triggers from the Union Budget, dealers said.

After witnessing a bouts of volatility, Nifty February futures closed at 5,285 points almost in line with the spot price shedding 16.93 lakh share in the open interest (OI) to 1.2 crore while Nifty March futures ended the day at 5,267, at a discount of 18 points with respect to its spot price. In the Nifty March contract the oil increased by 64 lakh to 3.75 crore.

Viral Mehta, derivatives dealer, Mehta Equities said, We witnessed good roll-overs this time, greater than the last three months average. The huge roll-overs were contributed mainly by the institutional and HNI clients who carried their long positions to the next month. We saw some good roll-overs in the stocks of power, capital goods and the cement sectors as investors are anticipating budget favouring these sectors. However we saw negative roll-overs at stock specific levels.

Meanwhile, the 30-share Sensex after gyrating in the range of 230 points ended flat at 17,824.48 points, losing 1.51 point or 0.01% and the broader S&P CNX Nifty managed to end on a positive note at 5,285.10 points gaining 16.7 points or 0.32%.

According to the provisional figures from the stock exchanges (SE), foreign institutional Investors (FII) were net sellers at Rs 809.10 crore while the domestic institutional investors (DII) were net buyers at Rs 732.38 crore on Thursday.