Provisional trends, according to analysts, showed that the rollover to the September derivatives series was higher than normal.
“We have seen long positions being added to the Nifty Index“and there was a spike in the last hour, which shows that there is momentum on the long side of the index, which carried over from August to September,” said Chandan Taparia, head of technical and derivatives at Motilal Oswal Financial Services“Short positions were also covered prior to this expiry as the market exited the consolidation phase.”
The benchmark Nifty 50 index closed 0.4 per cent higher at 25,151 points on Thursday after a volatile session. It hit a new all-time high of 25,192.9 points during the day. It has gained 1.27 per cent over the past month.
“We will target 25,500 as the next target for the Nifty,” said Rajesh Palviya, head of technical and derivatives research at Axis Securities. “The Nifty has also breached its all-time high barrier and has seen a surge in open interest this month, along with a bullish rollover,” he said. Traders looking at seasonal trends may have fewer reasons to be completely optimistic about the market in September. In the past 10 years, the Nifty in September has closed lower on six occasions, according to the data. JM FinancialAnalyst Neeraj Agarwal in a note.
The outcome of the US Federal Reserve and Bank of Japan rate-setting meetings scheduled for September will be key factors for markets.
“While the Nifty setup for September looks promising, September is an event-packed month with key ones being the US FOMC and BOJ meeting,” said Sriram Velayudhan, Senior Vice President, IIFL Values“Despite this, the HNI side has renewed their long positions as participants do not see any weakness in the market in the near future,” Velayudhan said.
SECTOR TRENDS
Palviya said the outlook for autos, pharma, textiles, telecom, technology stocks, NBFCs and FMCG looks positive.
“In the August series we have seen good rollover and optimism in pharma, IT, telecom and auto stocks with some stock-specific action also seen in FMCG and oil & gas and these sectors can be looked at in September,” Palviya said. Velaudhan said financial and auto stocks, especially 4-wheelers, have seen a build-up of bearish bets at the end of the August series. IT stocks have seen the build-up of bullish bets. 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 out of 10 years, he said.
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