Stopping Nifty weekly expiry will deprive hedging opportunity: Anand James
After BSE has announced that it will discontinue Bankex weekly expiries, the market is rife with speculations that NSE may choose Nifty Bank over Nifty as both exchanges have to pick one expiry under new Sebi rules.
Nifty Bank brings in higher volumes for the exchange, and better trading opportunities for speculators, but if Nifty weeklies go, then it would deprive investors the opportunity to hedge against major events that pop up more frequently now than ever, says Anand James, Chief Market Strategist, Geojit Financial Services. Edited excerpts from a chat:
The sell-off seen last week has made investors nervous about directional trends in the near term. Do you see consolidation or more downfall ahead?
At least 75% of the stocks in the major indices like Nifty 500, Nifty 50, Nifty Bank, Midcap 150, Small cap 250 as well as F&O segment are trading below their respective 10-day SMA. Consumer durables, FMCG and metal index constituents so far have shown more resilience, but financials often seen as a proxy to directional moves, have cracked. While Nifty50 is now near its 200-day SMA, giving some hopes of a recovery swing sometime early next week, sustainability is doubted, given the fact that only 43% of broader market stocks as represented by Nifty 500 index are trading above the 50-day SMA, suggesting that the downtrend may have more legs.
Following Sebi's new regulation, NSE is likely to discontinue all other weekly expiries besides Nifty Bank as it has higher volumes. What are your thoughts on which index has
