The latest rebound in the market comes after a sharp 10 per cent drop between February and March, amid rising yields in the US, global trade tensions and domestic concerns like banking fraud and political uncertainty. The latest rally is despite headwinds such as rising crude oil prices and weakening of the rupee.
Rollover trend points to further upside
The rollover trend on Thursday, expiry day for April series derivatives contracts, signals that the positive momentum will sustain, said analysts. Market-wide rollover for the April series was 85.5 per cent, compared to the previous three-month average of 84.4 per cent. Rollovers for the Nifty and Bank Nifty indices were 70.4 per cent and 81.5 per cent, respectively. Previous three-month averages were 62.6 per cent and 67.6 per cent, respectively. The high rollovers, amid a five per cent rally in the past month, indicate more steam left in the market, said experts.
“The majority od the rolls were on the long side. Foreign investors, too, have rolled over long positions. The long-short ratio has improved from 18 per cent to 53 per cent. Implied volatility has reduced. The options open interest shows the market range has shifted higher. Overall, the data suggests the momentum will continue,” said Sneha Seth, derivative analyst at Angel Broking.