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On Wednesday, traders carried forward their bullish Nifty futures bets to the April series, which was the expiry day of the March contracts. This was due to hopes of a recovery in equities markets amid easing concerns about the health of the US banking sector and retreating bond yields.
According to exchange data, about 74% of Nifty futures contracts were rolled over to April, which is higher than the previous series but largely at par with the three-month average. The cost to carry forward Nifty futures was seen at 87 basis points, higher than the previous series and the past three series.
Analysts have said that there are hopes of a rebound in the market if the index crosses 17,200, but the bounce may not last long as the sentiment is still nervous.
While the market recovery in the last half an hour of Wednesday’s trade and the Nifty closing above the 17,000-level has raised hopes of a short-term bounce, the market remains a ‘sell on rise’ until it sustains above 17,600 levels.
The net short positions of foreign portfolio investors in index futures remain high, and it appears that the foreigners may use the rally to rebuild their bearish bets that may trap traders who have entered the markets on the hopes that the market recovery will sustain for long.
On Wednesday, the Nifty closed at 17,080.70, up 129 points or 0.76% from the previous close, helping to trim some of the losses this month.
Bank Nifty rollover to the April series stood at 93.1%, higher than the previous series as well as the three-month average. The cost to carry forward Bank Nifty futures was also higher than the three-month average.
If the Bank Nifty holds above the 39,500 zone, the index could surge to 40,500-level. The Bank Nifty closed at 39,910 on Wednesday.
Traders await the next meeting of the RBI’s Monetary Policy Committee next week, scheduled to meet between April 3 and 6, which is the first of the fiscal 2024. Rollover of market-wide futures stood at 93%, which is comparable to the previous series and the three-month average.