Indian Traders Roll Over Fewer Index Futures Before Expiration

Indian traders extended fewer March CNX Nifty Index futures than in the previous six months, signaling caution before the securities expire on Thursday.

The rollover for March index futures was at 34 percent as of 4:12 p.m. in Mumbai, as investors replaced current-month contracts with April derivatives. The rate compares with a six-month average of 44 percent two days before expiry, according to data compiled by Bloomberg.

The lower rollover rate came after the 50-stock Nifty fell 4 percent in March, heading for its first monthly drop this year. The decline mirrors losses in emerging markets, amid concern that an increase in U.S. interest rates this year may lead to outflows from developing nations.

“Most investors are adjusting their balance sheets before the fiscal year-end and may hit the panic button on bad news,” Nilesh Dedhia, the Mumbai-based director at Vidhi Wealth Management Ltd., said in a phone interview. “Futures rollover is lower as traders turn cautious” with the Nifty below 8,600, and as brokerages don’t encourage leveraged trades before the end of the financial year on March 31, he said.

The Nifty declined 0.1 percent to 8,542.95, capping a fifth day of declines, the longest streak in six weeks. The gauge trades at 15.9 times its 12-month projected earnings, versus 12 times for the MSCI Emerging Markets Index.

The India VIX index, a measure of protection against stock market swings using options, slumped 4.2 percent to 13.67, its lowest close since Dec. 11.

Before it's here, it's on the Bloomberg Terminal.