The Rollover Revelations: Top 5 Stock Rollover – December 2023

Joy is widespread, and for good cause. The Nifty and Sensex have soared to unprecedented heights, joined by numerous other sectoral indices. Notably, the small and mid-cap indices surpassed the Nifty in reaching new highs. However, the Bank Nifty and IT indices find themselves in a struggle. It appears the Nifty took its time to climb the ladder, primarily because significant weights in the index, such as banking, IT, and FMCG names, faced challenges in delivering strong performances. Meanwhile, the broader-based indices reveled in upward momentum comfortably. Let’s delve deeper into the intricacies of rollover dynamics to better understand this market scenario.

The Rollover Revelations: Peeling Back the Layers

Highlights:

• The Nifty has begun the December series with a tad below 1 crore shares, nearly 10% lower than the open interest seen at the inception of the November series (1.10 crore shares).
• Bulk of the OI reduction can be attributed to short closure, indicating a shift in sentiment among investors.
• FII had aggressive net shorts in Index futures in November series around 1,75,000 contracts; however, they are starting December series with a much lower net short position at 57000 contracts, indicating closure of short positions.

Nifty vs. Bank Nifty: Rollover Battle

• Nifty’s rollover is at 73.06% versus 83.39% in October and 76% in September, with a rollover cost for November at 0.70%.
• Bank Nifty’s rollover stood at 80.29% versus 79.31%, with a rollover cost of 250.55 points.
• The Bank Nifty is starting December series near an 8-month high OI, suggesting a potential short-covering rally towards 46000 levels.

Insights and Predictions: Unveiling the Future

• The Nifty saw a lower rollover of 73.06% versus the three-month average of 80.65%, indicating a potential rise in the Nifty.
• The Bank Nifty witnessed an addition of 5% in open interest with a high rollover of 80.29%, pointing towards a positive sentiment and a potential carry-forward to the next series.
• FII action in the cash market was on the positive side, as they were net buyers of Rs. 5,795.05 crore.

Top 5 Stock Rollover: Riding the Wave

• High Rollover: Torrent Pharma, Adani Ports, Dabur, PNB, and Dalmia Bharat.
• Low Rollover:ONGC, NTPC, Sun Pharmaceutical Industries, BPCL, and Bharti Airtel.

In this rollercoaster of market dynamics, understanding rollovers becomes crucial for investors seeking to navigate the twists and turns of the financial landscape. The numbers and trends offer a glimpse into the potential future of the market, providing astute investors with valuable insights to make informed decisions. As we ride the wave of rollovers into the next series, the journey promises excitement and opportunities for those who dare to delve deeper.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.