A Focus on the November Series Outlook

The benchmark index Nifty witnessed a dip of 636.9 points in the October series. The bank and Information Technology (IT) sectors together resulted in a 372-point dip in Nifty, which is 58% of the Nifty’s total decrease in the October series. 

The Nifty Bank and Nifty IT witnessed a decrease of 4.5% and 5.19%, respectively. The Nifty rollover rate spiked to 83.4%, surpassing the three-month average. However, Bank Nifty’s rollover stood at 79.3%, which is relatively less than the three-month average. 

Generally, banking stocks experienced long unwinding mostly, while IT witnessed mainly short buildups. At the same time, Foreign Institutional Investors’ (FIIs’) long position in the index futures relative to the broader market’s long positions have dipped to 5%. 

This forms a significant 50% decrease as compared to September 2023. A similar decline was witnessed last month too, which pointed to the persistent bearish stance adopted by FIIs specifically in the past two months. 

The ratio of FII long positions in index futures relative to the total positions in index futures has also witnessed a dip, which stood at 10% from the previous value of 30% on the September expiry day.

A similar pattern had been observed in March 2023, followed by a subsequent recovery in the next month. This underscores as a positive sign for the November series, too.

Long unwinding was evident in the energy, consumer durables, financial services, oil and gas, and telecom sectors, while short buildup was experienced in the chemical, media, and IT sectors. Most sectors, barring realty, closed in red, and the advance-decline percentage in October 2023 stood at the lowest in a year.

Going by the sectors, capital goods, chemical, IT, oil and gas, and telecom sectors witnessed a considerable increase in rollover compared to the previous two series. In addition, low rollovers were witnessed in sectors such as healthcare, media, and realty stocks.