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Today, rollovers of March futures contracts to the next series were lower than in the previous months, owing to higher costs and a dull market outlook. Futures & options (F&O) contracts of the current-month series expired today.
The market-wide rollover, across stocks and indices in the derivatives segment, stood at about 79 per cent. For the Nifty, it stood at 53 per cent, against an average of 62 per cent this year.
Though overall rollovers were just a few percentage points lower than in previous months, these were quite low on an absolute basis. At the beginning of the April series, the open interest (the number of outstanding positions) is about 20 per cent lower than in the beginning of the March series.
Derivatives analysts said investors remained sceptical on market prospects and weak trade might continue into the next month. "The total open interest coming to the April series is low. There is not much interest in the market and, therefore, people are not rolling over their positions," said Siddharth Bhamre, head (equity derivatives), Angel Broking.
Yogesh Radke, head (quantitative research) at Edelweiss Financial Securities, said, "Given the high cost of rolling long Nifty futures positions into the next series, trades opted to buy Nifty 50 components and let the futures expire."
Today, the market, which had slipped below its 200-day moving average, ended on a positive note. The 50-share Nifty rose 0.73 per cent to close at 5,682.55, while the Sensex ended 0.7 per cent higher at 18,835.77, after hitting its lowest intra-day level since November 26, 2012.
Experts said the market wasn't out of the woods yet. Today's surge was purely technical, they added. "The market movement on the day of expiry doesn't determine any trend. It doesn't mean we have formed a bottom. A lot of people believe the market has entered the oversold zone and you would see a bounce. However, on a positional basis, if the market is oversold, open interest shouldn't be this low," said Bhamre.
Derivatives analysts said the majority of the positions carried forward to the April series were 'short bets' and, therefore, there was a risk the market could drift lower. "The market trend continues to remain weak, given the political uncertainty and the high current account deficit," said Radke.
