The Nifty opened on a positive note on Monday and almost touched the 4900 mark before a fresh build-up of shorts pulled it down to close 2.6% lower at 4722. The Nifty June futures added almost 19 lakh shares in open interest (OI) with the cost of carry (CoC) also slipping into the discount (the futures closed almost 25 points in the discount).
Further shorts build-up was seen on Tuesday and the Nifty touched a low of 4626 before bouncing back and closing almost flat for the day at 4707. The trend for the week continued to be weaker as more and more shorts got added, thereby resulting in the Nifty making fresh lows for the month.
Sell-off was seen across the board. The sectors most hit were power, banking and real estate. The Oil ministry announced a hike in the petro products which resulted in initial upmove but the OMCs were victims of fresh shorts. ONGC was the stock of the week as the stock witnessed short covering and gave a movement of over 15% for the week.
The fall finally got arrested on Thursday when Nifty touched a low of 4525 where for the first time during the week, the Nifty futures started trading into premium. This was a classic situation of short covering, resulting in the Nifty closing with a 2.4% gain for the day at 4679. The Nifty futures shed almost 15 lakh shares on that day.
Globally, too, the scenario was stable as crude prices had fallen over $6 the previous day. Short covering was seen in frontline banking, real estate and power stocks. Some metal stocks like Tata Steel and Sterlite also witnessed short covering.
Friday saw the Nifty opening on a positive note after a strong closing the previous day and stable global markets. However fresh shorts kept building at every level on the day and the Nifty finally closed at 4608 with over 1.5% fall.
Nifty futures added 10 lakh shares in OI in the form of short positions. Shorts build-ups were also further seen in
Reliance, besides banking and real estate stocks. Even a defensive sector like pharma witnessed selling pressure.
The closing for the US markets on Friday was very weak with over 3% fall. Nynex crude, on the other hand, has risen by $15 to $138. This is likely to add pressure in the current week on the Indian markets. Also, higher inflationary concerns on account of rising crude prices will add pressure on the banking and interest rate related sectors like real estate and auto.
However, we believe that most of the negativities should be factored in the market prices. On the Nifty, 4500 levels might be retested but that’s where one should see a market bounce-back. Indeed, the market can be expected to rebound when all the factors point towards a fall.
The market-wide OI stands around Rs 72,000 crore with most on the short side. Even on the options front, the Put implied volatilities (IVs) are more than the Call IVs. On the whole, we believe the markets are near bottoming out at least for the time being. As for levels, the trading range for Nifty would be 4500 to 4750 for the next 10 trading sessions.
Further shorts build-up was seen on Tuesday and the Nifty touched a low of 4626 before bouncing back and closing almost flat for the day at 4707. The trend for the week continued to be weaker as more and more shorts got added, thereby resulting in the Nifty making fresh lows for the month.
Sell-off was seen across the board. The sectors most hit were power, banking and real estate. The Oil ministry announced a hike in the petro products which resulted in initial upmove but the OMCs were victims of fresh shorts. ONGC was the stock of the week as the stock witnessed short covering and gave a movement of over 15% for the week.
The fall finally got arrested on Thursday when Nifty touched a low of 4525 where for the first time during the week, the Nifty futures started trading into premium. This was a classic situation of short covering, resulting in the Nifty closing with a 2.4% gain for the day at 4679. The Nifty futures shed almost 15 lakh shares on that day.
Globally, too, the scenario was stable as crude prices had fallen over $6 the previous day. Short covering was seen in frontline banking, real estate and power stocks. Some metal stocks like Tata Steel and Sterlite also witnessed short covering.
Friday saw the Nifty opening on a positive note after a strong closing the previous day and stable global markets. However fresh shorts kept building at every level on the day and the Nifty finally closed at 4608 with over 1.5% fall.
Nifty futures added 10 lakh shares in OI in the form of short positions. Shorts build-ups were also further seen in
Reliance, besides banking and real estate stocks. Even a defensive sector like pharma witnessed selling pressure.
The closing for the US markets on Friday was very weak with over 3% fall. Nynex crude, on the other hand, has risen by $15 to $138. This is likely to add pressure in the current week on the Indian markets. Also, higher inflationary concerns on account of rising crude prices will add pressure on the banking and interest rate related sectors like real estate and auto.
However, we believe that most of the negativities should be factored in the market prices. On the Nifty, 4500 levels might be retested but that’s where one should see a market bounce-back. Indeed, the market can be expected to rebound when all the factors point towards a fall.
The market-wide OI stands around Rs 72,000 crore with most on the short side. Even on the options front, the Put implied volatilities (IVs) are more than the Call IVs. On the whole, we believe the markets are near bottoming out at least for the time being. As for levels, the trading range for Nifty would be 4500 to 4750 for the next 10 trading sessions.
3 comments:
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