Trade next week is likely to remain volatile due to rollovers to the December futures and
options series, and as equities remain in a sell-on-rise mode. Rollover of positions will be
largely take place on Monday, and Tuesday, ahead of the expiry of the November
derivatives series on Thursday, as market would remain shut on Wednesday for Guru
Nanak Jayanti.
The underlying bias for market, though, remains weak, as market participants continue to
utilise higher levels as exit opportunities. However, a runaway up move seems unlikely in
the upcoming truncated expiry week as FIIs (foreign institutional investors) cash buying
is still missing. Yesterday, FIIs net sold Indian shares worth 940.9 mln rupees on the
BSE, NSE, and Metropolitan Stock Exchange combined, according to provisional data on
the NSE website.
The data showed domestic institutional investors net bought shares worth 6.10 bln rupees.
Besides rollovers, market participants will watch out for the Winter Session of the
Parliament, which begins on Thursday. The fate of crucial bills, particularly the Goods
and Services Tax bill, will be keenly monitored, more so, because the monsoon session
was a washout. Although Nifty 50 crossed 7900 points during the session yesterday, it
failed to sustain.
Yesterday, the index closed at 7856.55, up 13.80 points or 0.2% from Thursday's close,
while the S&P BSE's Sensex closed at 25868.49, up 26.57 points or 0.1%. Both the
indices closed sharply off the day's high of 1% due to selling in banking stocks. In the
futures segment, the gap between the Nifty 50's November contract and spot turned to a
discount of nearly five points from a 15.6-point premium on Thursday. Open interest in
the contract fell 5.3% to 15.79 mln.
In options, traders unwound long positions in 7700-put option of Nifty 50, while writing
was seen in 8000-8200 call options. After witnessing rollover of short positions to the
December derivatives series yesterday, banks are seen drifting lower in the coming week.
While support for the Nifty Bank lies at 16800 points, a closing above 17200 points is
likely to propel the index higher towards 17400 points. The Nifty Bank closed 0.1%
lower at 17055.60 points yesterday, off the session's high of 1.0%.
Stocks of Vedanta and Hindalco Industries are seen falling Monday as BSE yesterday
said these companies would be removed from the Sensex effective Dec 21. Asian Paints,
and Adani Ports and Special Economic Zone, which would replace these two stocks in
the index, are seen rising. GAIL India, the top performer in yesterday's trade, is seen
rising further to 360 rupees. The stock had jumped 10% to 349.55 rupees yesterday led
by a rally in shares of gas distribution companies. Automobile stocks are also seen rising
Monday and trade with a positive bias during the week on prospects of higher sales once
the recommendations of the Seventh Pay Commission come into effect.
