Infosys to Bharti Airtel, Asian Paints, Bajaj Finance Rollovers: Market-wide rolls 70%; Nifty rolls 53%; Stock Futures rolls 64% II Details highlighted

Infosys to Bharti Airtel, Asian Paints, Bajaj Finance Rollovers: Nifty scaled to a record high of 14753 on January 21, but since then it has been struggling to gain momentum. That milestone seems to have turned the focus on concerns that valuations have run too far, even considering positive earnings expectations.

The main “market driver” - FPI flows -have come off (31.86 bn outflow) in the last three days resulting in participants getting a bit jittery and even the Nifty has shredded 5.3% since. Even though MTD FPI flows (+INR 253.6) are strong, they have cooled off in comparison to the previous two months (+Rs 499 bn in Dec 20 and +Rs 663 Bn in Nov 20).

See Zee Business Live TV Streaming Below:

In this series, the sector rotation was witnessed as Auto Index was up 11% and IT Index gained 6.7%; both the indices scaled higher, while Pharma (3.3%), Banking (3.1%) and Metals (3%) saw profit booking.

The rally in Auto Index was driven by Tata Motors (up 45%| contributing 30% in Nifty Auto Gain) and Bajaj Auto (up 18%| contributed 21%).

The current Market wide OI in value terms is Rs 1530 bn vs Rs 1534 bn while Nifty OI in value terms is INR 190bn vs INR 227bn seen in Dec Expiry -1. The market wide OI is still on a higher side while Nifty has seen long unwinding as OI is down 16% vs. Dec Expiry.

Stock futures rollovers on the D-1 stands at 64% which is significantly lower compared to average rollovers of 78% (last three series). Overall market wide futures OI stands at Rs 1.530 tn as compared to Rs 1.534 tn on the D-1 of December expiry. Along with significantly lower rolls, the average roll cost levels in most of the names has also contracted and is 30 bps vs 40-45 bps seen in the last two series.

Nifty futures rollovers stand at 53% which is lower vs. the average rollovers of 55% seen in the last three series. Nifty futures rolls cost 25-30bps (profit to short rollers) which is again lower to 37-38bps seen in previous expiry, indicating lower aggression in rolling position to Feb-21 series. Nifty futures OI stands at Rs 190 bn (13.62 mn shares) as against the OI of Rs 227 bn (16.21 mn shares) on D-1 of the last series. Around 42.17k contracts from the January series got unwound.

Weak Rolls: Asian Paints, Bajaj Finance, REC

Long Roll Aggression: Bharti Airtel, Grasim, Infosys, and Tata Consumer