Provisional trends, according to analysts, showed the rollover to the September derivatives series was higher than normal.
“We have seen longs being added to the Nifty index, and there was a spike in the last hour, showing that there is momentum on the long side of the index, which was rolled over from August to September,” said Chandan Taparia, head of technicals and derivatives at Motilal Oswal Financial Services. “Shorts were also covered before this expiry as the market came out of the consolidation phase.”
The benchmark Nifty 50 ended 0.4% higher at 25,151 on Thursday after a volatile session. It made a fresh all-time high of 25,192.9 during the day. It has gained 1.27% in the past month.
“We will have the next target of 25,500 for the Nifty,” said Rajesh Palviya, head of technical and derivatives research at Axis Securities.’The Nifty has also overcome its all-time high barrier and seen open interest addition this month, along with a bullish rollover,” he said.Traders who look at the seasonal trends may have a lesser reason to be outright bullish on the market in September.In the past 10 years, the Nifty in September has closed lower on six occasions, according to JM Financial’s analyst Neeraj Agarwal in a note.
The outcome of the rate setting meetings of the US Federal Reserve and Bank of Japan scheduled in September will be key drivers for the markets.
‘While Nifty set-up for September looks promising, September is an event-heavy month with some key ones like the US FOMC and BOJ meeting lined up,” said Sriram Velayudhan, senior vice president at IIFL Securities. “Despite this, the HNI side has rolled over long positions, as the participants do not see any weakness in the market coming soon,” said Velayudhan.
SECTORAL TRENDS
Palviya said the outlook for automobiles, pharmaceuticals, textiles, telecom, technology stocks, NBFCs and FMCGs looks positive.
“In the August series we have seen good rollover and bullishness in pharma, IT, telecom and automobile stocks, with some stock-specific action also witnessed in FMCG and oil and gas, and these sectors can be looked at in September,” said Palviya. Velaudhan said financial and auto stocks, especially 4-wheelers, have seen a build-up of bearish bets at the end of the August series. Information technology stocks have seen the creation of bullish wagers. JM Financial’s Agarwal said the seasonal factor could benefit stocks like TVS Motors, Deepak Nitrite, Abbott India, Escorts Kubota, Zee Entertainment and Dr Reddy’s Laboratories. ICICI Bank, Adani Ports and SEZ, State Bank of India, Cummins India and Dabur India saw an average fall of 2% in September in 8 of 10 years, he said.