Nifty ended the May series with a 3 percent gain and Bank Nifty ended with a 4 percent gain. This is despite the fact that FIIs sold more than Rs 9,000 in cash in May and DIIs bought only 600 rupees. It shows that the sales section has been able to absorb sales from FIIs. Based on the charts and the fact that sales have hampered despite negative sentiment due to the second wave of COVID, we believe that market development should continue.
Stock futures Open Interest (OI) increased by 13.8 MoM in price terms. The smart participant and the structure of the sectors of this OI has changed dramatically.
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The exchange provides participant OI data and separates participants from clients, FIIs, DIIs and Proprietary publications. Clients especially leading investors have OI enet which is the highest level in the last three and a half years. Their long OI net increased by 55 percent in the series. The chart below shows the changes in the OI placement of the various participants. Net-short with DIIs is not a direct bet, but a short-term future held by arbitrage funds.
Among the sectors, Banking, NBFC and consumer basic food have seen the highest increase in OI.
The building materials sector despite seeing a major overhaul did not see a decline in OI which means that ambitions have kept their faith in the sector. Shipping costs also continued to remain high in the sector. Therefore, we believe that the sector should restart its movement in the June series.
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The significant addition of OI to BFSI indicates that even this sector should start making Nifty better. However, as there is still a lot of disbelief in the NPAs, we do not think it will be the best runaway.
The IT sector should also move on to the June series as it supports it at certain times of the year. In the last 3 phases, the sector successfully went 1-1.5 months ahead of the quarterly results and then contributed to the profit by posting results. The IT Index rating chart over Nifty is generated below and shows seasonal performance in good performance.
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