Stock market: What F&O rollovers reveal about FII short bets; stocks showing long bias

The NSE benchmark Nifty50 fell 3.1 per cent in the July futures and options (F&O) series, which was against expectations of a bullish bias that some brokerages were expecting earlier, given the historical trends. The July series saw broader markets also facing pressure, with midcap and smallcap indices falling 3.1 per cent and 4.5 per cent, respectively. Analysts noted that foreign portfolio investors (FPIs) have turned bearish, raising index shorts and cutting single stock future (SSF) longs. HNIs and retail investors remained bullish, adding longs in both index and SSF.  For now, derivatives analysts rule out a sharp correction but believe a further consolidation in the market is all likely.  

Nifty futures rollovers stood at 76 per cent against ana average of 79 per cent in the last three series. Alongside, Nifty futures will start the August series at lower open interest base of Rs 40,800 crore (1.63 crore shares) against OI of Rs 4,1600 crore (1.65 crores hares) seen at the start of July series. On

Market-wide futures open interest at the start of August series stands at Rs 4.952 lakh crore as compared to Rs 4.853 lakh crore  at the start of July series. Market-wide rollovers came in at 90 per cent, higher than the three-month average of 89 over. 

Stock futures rollovers stood at 92 per cent, higher than the average rollovers of last three series at 91 per cent. Most frontline names saw their roll cost hovering around 63 bps with average increase in roll cost across names being 1-2 bps, Nuvama said.

Nuvama noted that the sector-wise performance was mixed and the correction was seen without a corresponding rise in fear, as volatility (VIX) steadily declined. This points to an orderly sectoral rotation rather than a panic-driven sell-off, underscoring the continued importance of disciplined positioning in a dynamic market environment, the brokearge said.

August series; stock market outlook IIFL Securities said while it rules out sharp round of correction, structure will be more tilted towards sideways and consolidation. Only a break above 25,600 on Nifty would propel the Nifty towards new highs. In the near term 25,250 will provide interim resistance, IIFL Securities said as it sees downside support at 24,600 and 24,400 levels. 

Nuvama said August series promises to be an eventful one, with key triggers including the MSCI August 2025 Rejig announcement and the actual adjustment happening within the same month. 

It expects Vishal Mega Mart, Swiggy, Hitachi, and Waaree Energies to be among the top contenders for inclusion, while Thermax and Sona BLW (Sonacoms) emerge as high-conviction exclusion candidates. 

Notably, we believe Thermax—being a cash segment stock — presents an attractive positional long opportunity. Another significant development to watch is the Nifty 50 reshuffle. 

Nuvama expects InterGlobe Aviation (IndiGo) and Max Healthcare to replace Hero MotoCorp and IndusInd Bank in the index.

"The August series is likely to remain volatile given the multiple moving parts. We anticipate Nifty to trade within a broad range, with strong support near 24,200 and resistance around 25,300. According to our trading desk, Autos, FMCG, and Pharma sectors are best positioned for long trades in the August expiry, with visible long buildup and strong sectoral momentum," it said.

FPI short positioning  Nuvama said FPIs have significantly added index shorts while they reduced single-stock future longs. In the case of index, their net shorts stood at 1,38,000 contracts against 35,000 short contracts at the start of July series. In the case of single stock futures, their net longs stood at 13,3,90,000 contracts against 15,97,000 net long contracts at start of July series.

HNI and retail added longs in index while adding SSF longs. Their net longs stood at 1,04,000 contracts against 19,000 long contracts at the start of July series). In SSF,  their net longs stood at 21,79,000 contracts against 18,99,000 net long contracts (at start of July series.

Stocks with long bias