However, rollover of positions to the November series in these sectors have been relatively lower compared to the other frontline sectors.
Analysts, therefore, believe these two sectors could see a good up move in the November series if momentum in the market sustains.
“Interestingly the dark horse for November series could be IT and metal sectors, as the OI (open interest) base is quite lower versus averages, and any good surprise can lead benchmark and stocks higher,” Nuvama Wealth Management said in its report.
The Nifty IT index has gained 6.5% in the October series, whereas Nifty Metals index has risen about 6%. Much of these gains have come on the back of covering short positions, analysts said.
The rollover of positions to the November series in these two sectors, however, has been lower than the three-month averages.
Open interest in the IT sector in the November series is about Rs 16,700 crore in value terms, which is the lowest in more than a year.
The sector has been witnessing a lot of volatility amid the sell-off in new-age and other technology majors globally. Domestic IT companies’ shares have been of late, moving in tandem with the global trend.
Similarly, open interest in the metal pack at Rs 13,500 crore in value terms is the lowest in more than a year.
While stocks in this pack have seen a good run in the October series, they have been one of the major underperformers year-to-date.
Covid-hit slowdown in China, the world’s largest consumer of commodities, geopolitical tensions in Europe, and concerns of a recession in the US amid steep rate hikes have clouded the demand outlook for the metal pack.
Quarterly earnings so far have been underwhelming, but analysts are hopeful of a recovery in earnings in the second half of the current financial year due to the expected strong demand in the domestic market.
If stability arises in the global markets and equities hold on to the current momentum, metal stocks could also see bouts of buying, analysts said.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
