The Bank Nifty closed at a new record peak for the second time this month. Nifty too closed the previous week on a high, with just a couple of leaps away from a new record peak.
But the highlight of the week was FIIs returning as strong buyers in both cash and derivatives. In the index future segment, the long-short ratio rose to 38, after hovering around 20 for most part of this month. This was helped by the sharp covering of shorts with the end of the June series. Longs have also started to rise, but at a slower pace, and constitute 0.6% of the shorts, when compared to 0.2% seen in early June.
This is about to reflect a massive turnaround in FII stance. But in a way, this also suggests that FIIs can bring in more upside momentum to the market, as the index future longs have a good room for increase, before reaching historical extremes.
Nifty rollovers rise mildly in June series
The Nifty 50 wrapped up the June series on a strong note, buoyed by robust gains in the Banking and Finance sectors, followed by support from Oil & Gas. On the flip side, FMCG emerged as the biggest underperformer, with Power and Services also lagging behind. The Index saw a rollover rate of 79.53% in June, slightly above its 3-month average of 79.24%.
Bank Nifty’s rollover dropped to 75.75%, compared to 79.29% in May. Meanwhile, only 60% of stock futures ended the month in positive territory, down from 64% in the previous series.
The highest rollovers were recorded in UPL, Crompton, Titan, Dabur, and JSW Steel, while the lowest were observed in LIC, IREDA, Angel One, Manappuram, and Nykaa. Among sectors, Transportation, Capital Goods, Telecom, and Infrastructure led in rollover activity, whereas Oil & Gas, Realty, and Financial Services recorded the weakest.
From a positioning perspective, long buildups were most prominent in retail, financial services, and auto, highlighting bullish sentiment in these pockets. The June series featured trading in 220 scrips, with nine new additions and no exits.
Bank Nifty: More room for upside
With a new record peak, the second time this month, Nifty Bank shows no sign of easing from the uptrend. The MACD has crossed above the signal line on both the daily and monthly timeframes, and it is trading above all the major SMAs (50, 100 and 200), pointing toward the continuation of the ongoing uptrend.
Among the constituents, 75% saw long build-up on both daily and weekly scales, reinforcing the positive sentiment. Additionally, the average RSI of key banking stocks remains around 60, suggesting there is still room for further upside.
The Bank Nifty is expected to move towards the 59,000–59,500 range in the coming weeks, led by strength in stocks such as HDFC Bank, ICICI Bank, SBI, and Kotak Bank.
Nifty Oil & Gas sees narrow-range breakout
After consolidating in a narrow band since mid-May, the Nifty Oil & Gas index broke out decisively on Friday, forming a bullish Marubozu candle on the weekly chart, signalling strong upward momentum. A bullish crossover of the daily MACD line above its signal line adds weight to this surmise. The index also remains comfortably above its key moving averages, underlining its inherent strength.
Meanwhile, 80% of the index constituents saw long build-up on Friday, while 60% registered short covering week-on-week, both pointing to sustained bullish traction.
With momentum backing it, the index is expected to first aim for the 12,050 level, and then potentially scale up toward 12,400. This rally is likely to be powered by Reliance Industries and key players in oil marketing and gas distribution such as IOC, BPCL, HPCL and GAIL.
First published in Financial Express
