Finally, Nifty August futures series managed to end the day at a marginal premium of 0.55 basis points at 4,153.70 points as compared to the spot Nifty’s close of 4,153.15 on Wednesday.
Derivatives experts opine that the weaker hands with short positions in the market have booked profits as the market lacked clear trend. The political crisis at the Centre and the uncertainty regarding the US subprime mortgage market has resulted in frequent build-up of short positions and its squaring off leading to high movement in the market on either side, they said.
Though the Nifty future has managed to close at a premium, still market experts are skeptical as the implied volatility (IV) in Nifty options is still at a high of around 32-33%, clearly indicating that the market lacks clear-cut direction.
Siddarth Bhamre, derivatives analyst, Angel Broking, said, ?Though the IV is at 32-33% and is a matter of concern, it still has managed to come down from 38-39% recorded on Tuesday, which assures us that there won’t be any more panic selling in the market. On Friday last (August 24), the market had touched nearly its short-term bottom level. At these levels, we will advise investors to go long on select large cap stocks, but not on Nifty futures.?
On a similar note, Tejvinder Singh, derivatives analyst, Arihant Capital, said, ?The market wide open interest is standing at a high of Rs 80,000 crore, which shows that there has been no cut in exposure or panic selling in the market.?
Overall, there is a general feeling in the market that the August derivatives expiry will be a non-event as the market is frequently affected more by uncertainties surrounding US subprime mortgage crisis, unwinding of yen carry trade and political stand-off at the Centre.
