The November series of Nifty futures is set to begin with a higher open interest (OI) base compared to the October series, suggesting a significant short build-up. Rollovers for Nifty futures stood at 83%, higher than the last three series. Traders are actively shifting their positions to the November series.
On the expiry day, the roll cost for Nifty was slightly higher than the previous day’s. Market-wide futures open interest at the start of the November series is lower than the start of the October series. However, market-wide rollovers are higher than the three-month average.
Stock futures rollovers are higher than the average rollovers of the last three series. The roll cost for single stock futures (SSF) today was slightly lower than yesterday’s. The predicted fall in October has played out as anticipated.
The October series initially appeared to be calm for the domestic markets, but there was a sudden surge in volatile price activity from October 18th. This triggered relentless selling pressure and affected both heavyweight stocks and small and mid-cap stocks. The series showcased the dynamic nature of equity markets.
The selloff in October can be attributed to rising US bond yields, rich valuations of the Indian market, and the earnings season. The correction was long overdue and marks a significant shift in the market landscape.
During the October series, the Nifty Index declined, while the Nifty Bank, Midcap Index, and Small-cap Index also experienced losses. The PSU Bank Index was hit the hardest, followed the IT Index, Metals Index, Media Index, Pvt Bank Index, Fin Serv Index, and Pharma Index. The Realty Index was the only index that settled in the green.
Foreign portfolio investors (FPIs) pulled out over $2 billion from Indian equities in October, but the net inflow from March till date remains positive. Rising interest rates, US bond yields, and lofty valuations are reasons cited for the FPI outflows. On the other hand, domestic institutional investors (DIIs) continued to inject funds.
In conclusion, the rollovers and November series of Nifty futures provide insights for investors. The volatile nature of the October series serves as a reminder to monitor market dynamics. Investors should closely monitor rollover data and OI positions to make informed decisions.