The Nifty closed below the 4,300-level On Thursday at 4,260 on fresh short build-ups in index heavyweights such as Reliance Industries (RIL), ONGC, Bhel, ITC and NTPC.
Nifty July futures closed with a marginal premium to the spot as bulls rolled over long positions. Rollovers in the July series were lower at 19.72 million shares compared to 26.91 million shares in the June series same time last month. This means bears have allowed their short positions in the June series to expire.
The Instanex ownership index suggests that benchmark indices are in for sharp corrections. Institutional and retail investors have underperformed the Sensex in the last couple of days and they seem to have sold shares of RIL, ITC, Bhel, ONGC and Sun Pharma. On Thursday, they were seen buying HDFC, HDFC Bank and Larsen & Toubro (L&T) stocks.
We may see further correction in the market next week as the Nifty is trading around the crucial support level of 4,250. This level is crucial for the Nifty to continue moving forward. We may see the index breaking this support level, if the institutional selling in large-cap stocks continues. Sensing the weakness in large-cap stocks, bulls have not yet rolled over their long positions in most of them.
Rollovers in NTPC, SAIL, ITC and Bharti Airtel in the July series were lower by over 4 million shares compared to the June series. Ranbaxy Labs, ONGC, Gail, ACC and State Bank of India (SBI) too have witnessed a decline in rollovers as these stocks saw sharp corrections in the last few trading sessions. RIL, which declined by 2.03 per cent, witnessed short rollovers of 2.70 million shares.
