<b>Budget Cues</b>: Strong rollover of longs

The bears extended their short positions in morning hours following weak global cues and a mixed trend in the Asian markets. However, they chose to play safe and squared off their shorts late in the afternoon ahead of the Union Budget.

The Nifty ended the day with gains of 17 points at 5,285, whereas the Nifty February futures moved up by 23 points to close at 5,280.

With the bears squaring off their short positions in February futures contracts, the discount to spot Nifty declined from 11 points to five points.

The Nifty March futures discount compressed to nine points from 25 points, while the rollover per cent increased to 72 per cent from 69 per cent yesterday.

The average rollover cost (short rollover) for Nifty futures fell to 17 basis points from 63 basis points. The decline in rollover cost has been largely on account of aggressive long rollovers.

There has been a substantial increase in rollovers of February series contracts (7.90 lakh), unlike the January expiry (7.36 lakh), which indicates that players are back on account of lower volatility.

The market wide open interest in stock and index futures aggregated Rs 52,000 crore, which is 74.6 per cent of the total open interest of Rs 69,748 crore.

The Nifty PCR declined to 1.43 from 1.74 due to the expiry of February contracts. Call options built-up was seen at 5,300-5,500 (resistance) strikes and Put options build-up took place at 5,100-5,200 (support) strike prices.