The key benchmark indices extended their gains in late trade On Wednesday on buying by funds and short-covering in Reliance Industries (RIL) and ICICI Bank counters. However, F&O traders were not willing to take positions at higher levels ahead of the expiry of March contracts. The Nifty March futures closed at 2,990 as against an average index value per trade of 2,959, while index heavyweight RIL closed at Rs 1,540 compared to an average traded price of Rs 1,497.
Bloomberg data suggested that almost 25 per cent of trades in Nifty futures were executed at less than the average value, while 10 per cent trades changed hands at around the day’s high. This means traders are wary of the current pullback and wanted to play safe before expiry.
The Nifty April futures witnessed rollover of fresh long positions as it added an open interest (OI) of 6.22 million shares at a premium to the spot and the March futures.
Technically, the market would have seen a sharp correction had it opened gap-down. However, the Nifty opened on a flat note and, after minor corrections, it closed at the day’s high. Technical analysts expect the markets will set the tone for some more downsides, sooner or later. Options traders, however, expect the Nifty to trade around 2,900-3,000 as is evident from the fact that they were writing 2,900 call options and hedging through buying 3,000 call options.
