Rollover hints at markets coming out of brexit hole

1. Rollover Hints at Markets
Coming Out of Brexit Hole

2. Contd…
Rollover to the July series suggests that the market has overcome the Brexit
jitters and the bulls are firmly in command to take the indices higher this
month. Traders rolled over bullish bets on Nifty to the July series on expiry of
the June contracts on Thursday amid hopes the index would rise about 2.5%
during the month of July .Rollover in Nifty futures to the July series was 78%,
compared to the last three months' average of 70%. The higher rollover,
coupled with traders willingness to pay a higher cost to carry forward
positions at 40 basis points (bps), indicates the underlying positive
momentum is here to stay, analysts said.
“Bulls have been quite strong to arrest the fall in this series. For the July
series, market participants are looking at a positive market on an overall
basis. Most sectors have seen rollovers of 75-80%. On the index futures, FIIs
are on the long bias side,“ said Yogesh Radke, head of quantitative research
at Edelweiss Securities.

3. Contd…
Rollover of all index and stock futures to the July series stood at 81%, as
against the average of 78% in the last three months.
Analysts said the market has shrugged off the uncertainty surrounding
Brexit, thanks to the improvement in monsoon and expectations of the
Goods and Services Tax (GST) getting passed in the monsoon session of
Parliament.
Benchmark indices hit their highest lev els of 2016 on Thursday .
During the June series, Nifty gained 2.7% and Sensex rose 2.4%.
Open interest of Nifty futures on T h u r s d ay w a s `16,200 crore com pared
to `16,400 crore when the May series ended. The number of futures
contracts rolled over at 1.96 crore as against 2.04 crore at the start of last
series. “Brexit concerns have eased.

4. Contd…
The monsoon, although delayed, is now satisfactory and a lot of reform action has taken place. The
only concern now is how the results will turn out to be,“ said Jitendra Panda, MD, Peerless
Securities. Some on Street Remain Worried XX13 A section of the market is cautious on worries the
market has rallied too fast too soon amid lingering global worries. From March 1, Nifty has gained
18.6%.
“Market has rallied well but it is near major hurdle zone. Nifty has attempted to sustain above 8300
a few times in June but drifted lower. Now, if it manages to hold above 8300-8333 then only the
next leg of rally will start towards 84508500,“ said Chandan Taparia, derivative analyst at Anand
Rathi.
Radke of Edelweiss also said the incremental upside in the market would be gradual. July options
data showed highest concentration among call options at 8500 and among puts at 8000.
Among sectors, Nifty Metal, FMCG, Realty , Auto, Bank and Energy indices outperformed
benchmarks in the June series, rising 3-12%. Analysts said these sectors are likely to perform well in
the June series as well. The information technology sector saw higher short positions being rolled
over, suggesting stock contracts are unlikely to outperform in the July series, analysts said.

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