INSUBCONTINENT EXCLUSIVE:
After trading at a premium in the first-half, the March Nifty futures contract closed at a discount to the current month contract,
indicating that traders rolled over short positions to the next month, adding to the bearish tone of the market
The Corona virus outbreak to other parts of the world has roiled global markets.
The March futures contract closed at 11696.1, 1.9 points
The premium between the near month futures and next month is normally 35
Even if some companies with large promoter holding pay dividends to shareholders in March, the premium would narrow and not turn into a
discount, which has happened because of short rollovers.
At opening on Wednesday, the March contract traded at a 27.4 point premium to the
But this time it is trading at a discount of 2
Even after adding the expected dividend of 16 points in March, the March futures have only 14 points of premium with February futures
This means the shorts are rolled into March series as well
derivatives head at ICICI Securities.
Rajesh Palviya, derivatives head at Axis Securities, also feels traders would have initiated short
The market closed below this level, at 11,678.5, and if the situation worsens because of global fears around the virus, analysts like Kunal
Shah of Indiabulls Securities and Rohit Srivastava, founder IndiaCharts, expect the Nifty to get support at 11,500-11,550.
The 11,550 level
is the 50 per cent technical retracement between the low of 10,670.25 on September 19 last year and the 12,430.5 on January 20, 2020
The 200-day moving average of 11,682.8 was breached but some analysts expect the market to get support and stage a short-term bounce.
