FIIs and DIIs were net buyers in last Friday's session. The FIIs were net buyers with investment worth Rs 144.04 Cr (prov. cash market fig).
Another tumultuous week is behind us but the pain may linger for a while before we get a major relief. Markets hit their lowest level since Aug 10. Once again, it turned out to be a black Friday for Dalal Street. Domestic indices witnessed a bloodbath and plunged to the lowest level since August 2010. Heavy sell-off across the board was witnessed in the last hour of trade.
Market made various attempts to bounce back, but negative news flow coupled with FII selling was strong enough to keep it at bay.
Markets got spooked off on rumors of further arrests in the corruption and money laundering issues brought fore by the media. The bear operator took full advantage of the situation and exploited to the fullest. FII continued to sell having sold Rs. 27bn in the last six trading sessions. The corresponding fall in the markets was however steep as there is paucity of serious long term domestic capital to combat the outflow.
Inflation continues to remain high. The fate of budget session is still in limbo as opposition continues with its demand for JPC. With bank FD rates ruling at ~10% and expected to go higher in near future, the appetite for risk is little with the Investors to commit their money for additional 5-7% return, given the risk. The swings and volatility would be very high going into the next week as the markets approach the value zone.
Two successive week's of sharp fall now brought Indices on crucial Support Levels. Sharp fall of over 15% in Nifty OI PCR to 1.11 over the week is suggestive of LONG build-up on NIFTY OPTIONS, although NIFTY FUT FEB 'Discount' are suggestive mild SHORT positions in FUTURES segment. Silver-lining in last week's fall was FIIs turning 'Net-Buyers' for two successive days towards end of the week. If this trend continues in the coming week, a sharp-bounce back, triggered by 'short-covering' is not ruled out. Marketmen would be keenly watch advance GDP estimates for FY11 that to be announced on Monday, 7th February, 2011 and IIP-data for DEC 2010 likely to be announced on Friday, 11th February 2011.
FOR TODAY: Asian markets are trading mixed. SGX Nifty is trading at 5380, down 2 points. Nifty may open between 5375-5384 and will try to clear 5400 zone. Above 5440-5445, one may expect 5460/5480/5500. On the downside, support is arising at 5350. Below 5350, we may see 5300/5175 level within a few trading days.
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