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Posts Tagged ‘FII

Tight Lending Puts India’s Growth at Risk

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Earnings disappointment is a huge risk to the markets expectation from Indian companies.

Infosys may be the harbinger for not so good corporate news going forward.

Inflation, high interest rates, political challenges and one can continue the head winds that the Indian corporate will face going forward.

The crude oil prices are hovering well above the $100 mark, and with no indication of that cooling in the near term high Inflation would continue to worry the developing economies.

With the inflation numbers revised upwards from previous projection of 7% to 8% by the RBI, interest rates would continue to remain higher. In a regime of high interest rates the cost of credit for major Indian companies increases.

Also other factors such as political turmoil and other global challenges are getting tougher to grapple with.

FII Flows:

Even though flows into EM markets was positive, there is marginal outflow from India specific funds as reported by fund-tracker EPFR Global in the week ending April 13. So the picture from fund flows seems mixed.

Technical Picture:

The 5930 level on NIFTY has now become critical and today’s reversal keeps the bearishness of the market intact.

A break below 5730 will definitely open up test of the 5200 lows and potential break of that.

Only above 5950 and 6000 levels will we be comfortable that we are only in a range and not in a bear market.

Written by Sayanta Basu

April 21, 2011 at 4:38 pm

Posted in Market Watch

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Where do we go….

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What catches our eyes in this morning’s newspapers is whether yesterday’s rally was the end of the fall or just a dead cat bounce.

Let us just dig slightly deeper into what entailed the markets in yesterday’s trade, to draw a picture of where it’s heading in the near term.

Taking a glance at the inflows, the FII’s were net buyers yesterday, and the DII’s numbers were flattish. The trend since the last few days has been FII’s selling, with mixed activity from the Domestic Institutions. This indicates that there is a definite air of caution amongst the investors, either they prefer profit booking at higher levels on Nifty or they prefer to stay out in times of confusion.

If we look at the option activity, we are seeing the Open Interest buildup in Nifty calls have seen a buildup in Options from 6400-6500 to 6300 levels for current month, which signals that investors have mellowed down the probable rise in the market for this expiry. And 6300 levels seem to be a threshold for strong supply. In the put side, the 6000 put has consistently seen a strong buildup in open interest, which probably indicates that the fear begins to creep in below 6000 levels in the market.

Technically the chart setup suggests that the uptrend has taken a setback, with a dip in RSI and MACD being in the sell mode. Only a breach of 6230 levels on the upside could signify that this fall was just a blip in the rally, and market will resume its uptrend. However on the downside 5930 levels would be a crucial support.

Generally the markets look very fragile when they are testing the support as a multiple attempt in a short span of time. The tendency then becomes to break the support, create confusion amongst the investors and traders, and then resume the next move.

Whether there is an actual change in the global scenario with China, being the volatile market it is, facing strong selling pressure. The picture would enfold going forward, but to make a conclusion now can lead to misinterpretation of the markets.

Trade with caution, and play stock specific. This should be the ideal strategy for the day.

Adhere to your stop losses.

It is always good to accept your mistakes and come back strongly rather than being rigid and not learning from them


Written by Kunal Bothra

November 16, 2010 at 6:42 am

Posted in Morning Markets

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