Nifty support placed at 4750-4800 levels ::Emkay

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Nifty support placed at 4750-4800 levels

View: With global indices trading in the negative territory, we expect the Nifty to open on a weak note. Data indicates strong support for the index placed at around 4750-4800 levels, wherein a bounce back cannot be ignored. The risk to our view remains the high put-call ratio of open interest.

The Nifty put-call ratio of open interest increased to 1.28 levels. The ratio has been moving in a range of 0.85 levels to 1.35 levels since January, 2011. The ratio has a direct correlation with the index. Any reversals in the ratio will suggest a cautious view.

Nifty September futures started with an open interest of 21.61 million shares, highest in last 3 series. The cost of carry increased to 6.16% from 0.60%, indicating long accumulation. Market-wide open interest (excluding index) stands at Rs269.57 billion as against Rs337.49 billion in the previous expiry.  Among Nifty options, maximum accumulation is concentrated at 4800 put strike with an open interest of 4.94 million shares and 5000 call strike with an open interest of 3.92 million shares.

Nifty rollover stood at 70.88%, higher than its 3-month average of 66.08%. Market-wide rollover (excluding index) stood marginally lower at 84.56% as against 3-month average of 86.02%. Maximum sectors ended with lower rollover vis-à-vis the previous expiry. Telecom (78.96% Vs 87.67%), Technology (80.08% Vs 86.56%) and Banks (79.89% Vs 84.15%) disappointed the most. Sectors such as Auto (86.26% Vs 80.54%) Oil & Gas (85.03% Vs 83.41%) witnessed better rollovers as compared to previous expiry. Rollovers in Cement (84.74% Vs 85.22%), Pharma (83.10% Vs 83.19%) and FMCG (84.91% Vs 85.27%) remained unchanged.