The Crash( 17.5.2006) and FII activities since then

Hi

Just a brief take

DOW and NASDAQ both closed around or near their previous closing after opening high and buckling under selling pressure at the last moment.

Well . the implication is every rise will bring supply and depress the prices on every round of profit booking.
But all the four charts including dow, nasdaq sensex and nifty is showing remarkably similar features and movement.

The uncertainty of BOJ, corporate earnings and monsoon drama etc will keep markets quite choppy but on uptrend. As the indian growth is not as hot as china so there is no need of slowing down of economy but inflation will have to be contained for a sustained growth.

The market will as usual chalk out a zig zag path but from 2632 and above it appears we have firmly crossed the rubicon and will go up while consolidating. One thing needs to be kept in mind not all stocks will go up at the same time or come down in synchronous movement. Some will move at a later date.

The period will be that of consolidation and accumulation.

Pankaj

Hi all,

i think it is good news.
"Goldman Scahs made basket buying of 380 cr in a single day, and that too just now when sensex is at 10500!"
Why they didn't wait for 7700 or 7k as they were predicting for our market!
wrgrds
ahmed

To quote a Mr. Fibo's post from elsewhere (I dont know if I can sorry):

1.) CLSA was bearish when sensex hits 7600 levels in oct.. Can u believe them??
2.) Goldman sachs bot huge qty of zee telefilms at Rs 1000 levels at tech boom.. They have to book heavy losses.. In the similar way, they were buying Mawana Sugars above 110 levels in 3 separate blk deals and again they are averaging it at 80 levels.. Why they have to buy stks at blk deals now and they can buy in small lots without any blk deal reflection.. These sort of multiple blk deals (if small in nature) are always sceptical..

Hi czar

Can't help following you

I am following these types of buggers ever since 1989 when India was truly in dire strait and had to remember lot of answeres about Indian economic data and see how bad it is or what could be done to improve Indian economy and how can we get ahead of hindu rate of growth(3.5% at the most). I don't know how many people know of those arguments which included several measures which are now routine.

CRR/SLR were great thing those days. Nobody thought of tinkering with it by huge margin. Rupee was at fixed rate. Imports terifs were fixed to protect our indutries.Exports suffered.

How many of us remember that Reliance faught pitched battle with Nusli wadia of Bombay Dying in those days. Big scandal. and equally big dreams.

It was great to have a POTs at your home or office. Now my peon or driver or part time wage earners all have Mobile. We have come a long way.

Of course tracking stock market was last of our Idea when we wanted to crack the highest exam those days. Now even a fresh graduate earns sums that would have been unimaginable those days by writing software for USA.
I remember Rajiv Gandhi launching a Technology mission for Low cost PC . Sam Pitroda came to India in those times.

I believed that India will grow despite stock market scams and officialdom and red tapism and inspector raj. I saw many things just disappear as their existence was anachronistic.India has gone through toughest of Financial crisis and financial emergency was about to be declared but for IMF giving breather.What we see now is a very prudent managements , wobbly but on the right path, that has taken India to this height. Once uopn a time USTR was a big shot and trips and trades were big issues. Now our commerce minister just walked out of WTO meet and it is being called a likely failure. Those days there was Urugway round and UNCTAD which led to WTO.

Still more things to be done. See how everybody accepted STT now.

Those buggers had reduced Indian rating to negative. We had to plead IMF to give us SDRs. Now we don't want that and infact repaid our loans in advance. We offered America to help in Florida crisis. We were first to respond to Tsunami with help to Indonesia and Sri Lanka. Our response to tsunami devastation in India was equally swift and comprehensive. WQorld bank people now come and want to know How we did it inspite of so much contradictions. NGOs are major partners in rehabilitations . This could not have been imagined in those days.


I have a theory for these FIIs.

Its called Hisenberg's uncertainty principle.

You can not measure two interrelated variables with certainty and without disturbing the system.

You can measure either price or profit inrelation to movement of money. If you have X amount of money to take out from the system you can know the prices at each point but you will not know what the profit would be as the next movement prices will plummet and reduce the profit on existing stake. If you measure your profit at CMP for a certain amount of stake then you would not know what the CMP would be next. When FIIs enter or exit they make big difference and disturb the equilibrium irrespective of economy. But if they enter a very unstable system like Serbia they will see neither CMP nor profit nor principle.India is a stable system so they have a chance of measuring at least one.

Sachs, as you have already said , don't believe them. They have a stake in misleading you, the Indian.

India has a long way to go. And ,by god ,we will go.
Pankaj

Amen to that last part... I remember a song "Bow down mister,,," Well I do to your immense knowlege genuinely, you make me feel like an ant...lol

Hi czar

Just my crazy thoughts.Samuel johnson once told "Patriotism is the last refuge of a scoundrel." Don't give a dime to my utterances.

Keep market on your side. You are master of Market. I am just a watcher.

Pankaj

Always a delight to read Pankaj and Czar:s posts . I am now spending more than 2 hours ( Of my office time ) to read all your posts at various threads. DB of knowledge out there in your posts ..

keep up your work and a good one .

Hi

Today's FII data from NSE

FII trading activity on NSE and BSE in the Capital Market segment(In Rs. Crores)
Date--- Buy Value--- Sell Value--- Net Value
3-Jul-2006--- 1330.03--- 1072.48---- 257.55


And from SEBI


Reporting Date--- Gross Purchases(Rs Crores)--- Gross Sales(Rs Crores)--- Net Investment (Rs Crores)--- Net Investment US($) million at month exchange rate
03-JUL-2006--- 1793.40--- 1687.10--- 106.30---- 23.40


And MFs

Date ---buy---sell----net

30.06.06----762.74----328.97 ---433.77



FII Derivatives data(Amt in crs) from NSE for 3.7.2006

------ BUY--- SELL ----- OPEN INTEREST AT THE END OF THE DAY

INDEX FUTURES---- 1352.86---- - 985.04 ------7181.19
INDEX OPTIONS ---- 251.68-----75.85 -----1152.55
STOCK FUTURES ---- 267.20 ------ 267.43-----6913.48
STOCK OPTIONS----8.92 36 ------1.26 ------25.55


Derivatives data fro FII from SEBI for 30.6.2006


instrument ---BUY ---SELL ---OPEN INTEREST AT THE END OF THE DAY


INDEX FUTURES----2599.21----2259.98---6360.23

INDEX OPTIONS-----254.86----177.45----813.45

STOCK FUTURES ----2180.57 ----2087.36 ----6492.16

STOCK OPTIONS ---1.87---11.62------14.76

For 29.6.2006


----BUY---- SELL ----OPEN INTEREST AT THE END OF THE DAY

INDEX FUTURES---3030.23---2769.81---9295.67

INDEX OPTIONS----47.70----69.41 ----3179.64

STOCK FUTURES---1941.73----1874.57----9237.99

STOCK OPTIONS----12.33----12.49-----101.30



So from both sebi and NSE one can say that they are reluctant buyers. But buying in small quantity in SPOT.

While derivatives data shows marked reduction in open interest. Perhaps czar can comment on the significance of it in relation to spot market operation of FIIs

On global market except Seoul all other indices were in green but marginally so.

Europe was in green except for Spain.
Latin America was also in green.
Dow and Nasdaq have started in style.

Waves of optimism is sweeping so investors, who stayed away from market bloodied by unseen forces of Hedge funds and Inflation , are returning in droves like herds of sheeps following the shepherd.

July will be the period of consolidation.Same goes for August.Caution is the buzz word and one needs to be stock specific.

Bse and NSE has not strayed from their international brethren too far and are likely to follow. It has not only showed consolidation tendencies but also ended higher. Now one thing we have to remember that we are still in the range of 9500-11000. As long as we are below 11000 danger of going to 9500 is not gone. But it is unlikely to test anything below 9500 even on July 14th when BOJ announces its intension to raise interest rates if at all. If it does not increase then market will get propelled into the next range else we may expect some fall, may be 10 to 15% in a day . That's all, Thank you so much, the investor would say.

So primary trend is up and by the time we realize it would be the time for FII game show on roller coaster ride at 17000 coming down to 14500 and crying foul.

Pankaj

ps: As the Wizards have returned, it would be profanity to comment on the market from now on. I was here to fulfill the gap, having done my job in the interregnum, I feel it might be a good idea to start reading and learning from the Masters and Wizards.

Just a wicked thinking. I am happy to note that they are also loosers in these markets. At least we are having the company of some great institutions. We alone are not crying. I just remembered an earlier press report stating about a murderer saying to Salman Khan at jail that he is happy that he is in the company of great men.

Just curious,todays volume was lowest in 3 months.I dont know whether its of any significance.