)
A sharp surge in open interest (OI) on Thursday and expiry of October series derivative contracts, indicate market sentiment continues to remain positive, said analysts.
OI refers to the number of derivatives contracts not settled or squared off at the end of a day. High OI indicates an increased level of market activity.
While rollover percentages remained lower than previous three-month averages, a nearly 20 per cent increase in OI is seen as indicating a return of confidence in the markets, which have seen bouts of sharp volatility in the past month.
“The low rollover percentage remains low but the OI has gone up sharply. This means investors are going long on the index and overseas confidence is returning,” said Siddharth Bhamre, head of derivatives, Angel Broking.
“OI (levels) suggest the pessimists are going out, neutralising the negative bias, and optimists are rolling forward as the index touches new highs. This also creates more headroom for an upside,” said Bhavin Desai, equity derivatives analyst, Motilal Oswal Securities.
Bank Nifty futures saw a rollover of 68 per cent, higher than the three-month average. Analysts said these and other banking stock futures also witnessed robust long-position rollovers. “The increase in OI also means an increase in leveraged positions, bringing higher volatility in the market,” said Yogesh Radke, head of quantitative research, Edelweiss Securities.
Long positions were seen being built-in for metals, information technology and banking sectors, analysts said.
Manoj Muralidharan, derivatives analysts at Religare Securities, said power, realty and oil & gas will be in focus in the November series.
