The Crash( 17.5.2006) and FII activities since then

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
13-Jul-2006--- 991.4 ---990.46 ----0.94


Figure Form SEBI


Reporting Date--- Gross Purchases(Rs Crores)--- Gross Sales(Rs Crores)--- Net Investment (Rs Crores) ---Net Investment US($) million at month exchange rate
13-JUL-2006--- 1814.00--- 1438.70--- 375.30--- 81.50



Mutual FUnds
date----Buy---------sell---------net
12.07.06----474.89----342.61 ----132.28

Total for June---2046.78 ---2732.24 ---(-685.46)



FII DERIVATIVES STATISTICS FOR 13-Jul-2006 NSE
----BUY ---- SELL -------OI
Amt in Crores
INDEX FUTURES---- --- 500.50---- ----1410.42---8945.05



INDEX OPTIONS ---- 21.97---- --- 13.39----1962.05
STOCK FUTURES ---- 364.49 ---- 489.93-----8618.15
STOCK OPTIONS ---- 9.18 ---- 2.27-----75.92


NSE ADR
Advances 479
Declines 420
Unchanged 31


Volume was not much.FIIs are clearly refraining from either diluting or making major commitment. Such a retrained approach is being seen for last several days where buy and sell volumes for FII are very low.

This indicates that they are waiting for direction to emerge on the global front before they either withdraw or commit any further.

BOJ meet is Tomorrow.This will have quite an impact on global liquidity position for speculative purposes.

Markets world over is red. Not a single indices is in green.Worldwide sentiments are quite negative.In fact SENSEX and nifty recovered from days low though remained in red.

Dow and NASDAQ has started in red.

Israel , Nigeria and Iran, OIL and Inflation, liquidity and speculation, WTO and likelihood of failure of Doha round of Talks(Tough bargaining), BOJ rate

Inida has fared better in the face of mumbai blast and mumbaikars have shown their mettle in adversity.This single factor itself is enough to indicate the bright future that we have inspite of inefficient Govt , politicians and terrorists.

Yet prudent advice for Long term investor would be to move cautiously.Pattern seems to be quitely moving towards consolidation and in view of BOJ and next Fed rate hike due next with no guarantee to stop and escalating political uncertainty seems to push us towards caution rather than hasty investment and leisurly repenting later.

Pankaj

Hi


Dow Closed Lower on marked weakness

Prev Close: 11,013.18
Open: 11,012.62----Close: 10,846.29---- Change: 166.89 (1.52%)
Day's Range: 10,832.93 - 11,012.62
52wk Range: 10,098.20 - 11,709.10


Nasdaq was also in the same league.
Prev Close: 2,090.24
Open: 2,076.39----Close : 2,054.11 ----Change: 36.12 (1.73%)
Day's Range: 2,054.10 - 2,090.24
52wk Range: 2,025.58 - 2,375.54


World Market appears to be jittery on oil prices and middle east crisis.Iran crisis will only lend fuel to fire.

Indian Market have shown resilience on the back of buying by FIIs and MFs on 12th July.

But FIIs are net buyer for July 06 while Mfs are still net seller. Clearly market weakness has caused redemption pressure on MFs as their performance will take a hit this quarter and investors may be scurrying for cover and safety.



Generally the idea for long term investor is to try to buy low.In bullish time it would be difficult to find such stocks at fair values but during correction the sentiments will cloud the judgement. The contrarian strategy stipulates that when everybody is selling one might think of buying. The selling pressure is broadly linked to the factors which are not internal but external and India has not much control over them. Therefore it would be difficult to read what the scenario would be in the times of uncertainty. For example whether USA will go for another adventure in Iran or if oil source in Iran or other hot spots would be disrupted.

Demands for doesn't seem to be abetting and that clearly means that the economy is growing inspite of oil prices at record high.I just remember in 2004 oil was again a major concern and it was slated to cross $37. Well that's now history.

It touched a record high at $76 and it might touch higher.Govts are thinking of ways and means to substitute for oils as that would become viable if prices rule high. But I doubt that there is a viable alternatives. We do have stories but no substance. Oil producing companies would be benefitted but marketting companies would take a hit.

As our import bill rises there would be less money available for other sectors which in turn slow down the development process and thus reduce the consumption of oil and causing prices to drop.Monetary Liquidity crisis which might hit the financial market in view of rate tightening , would have the impact of reducing money for development purposes and making projects costly and many would get shelved. IPO market would not be available due to negative sentiments and thus also development would slow down.

The china has been able to generate huge surplus or Foreign currency due to positive balance of payment. They are exporting more than what they import.
They can easily finance their energy needs by selling cheap clothes and cheaper toys. Who gives a dime for quality. But in any case our Indian manufactureres are not known for quality either. They are unable to export and generate positive BOP. Most of the businessmen are busy trying to cut through red tapism or hoodwinking the policies for their advantages. Serious and honest entrpreneurs suffer. The repurcussion is that we are in negative BOP. So the objective of exporting more to other countries is not achieved.


Import content needs to be analysed for its type. Is it in the nature of capital goods or in the nature of consumer goods? If it is second type( which can not be avoided in WTO regime) then import will not reflect development process. But on the other hand it is for capital goods then it indicates development. Large part of import bill is oil bill.

Today BOJ would be meeting in Tokyo to decide on rate hike after a looooong time. As ahmed said it is very significant.


Our market has corrected by more than 26%. Some more corrections would be in the offing. The concerns raised above or indicated are related to macro economic performance. Individual stocks always have a chance to perform even in a sliding economy. And ours is certainly not a sliding economy.

The uppermost question in everybody's mind is that if this correction is over or not? or if it is time to purchase stocks?

I believe that stocks would have reached its low on 14th June
14-Jun-2006 2665.05 2767.75 2595.65 2632.80(OHLC)

So far it has held its long term bullish trend. But the crucial test is yet to come. BOJ. The question is whether FIIs would dump emerging markets and go for other safer(???) markets or stick to EMs and India in perticular.

Well, I think they are sticking around and and their objectives have been fully met. They did,t sell to the extent to call it exodus. But swift selling was in itself enough to cause a deep correction. Oue long term objectives are intact and economy would continue to grow by virtue of resilient Indian public.

As for today's market It might start weaker but as day progresses its movement would depend on BOJ and its impact on various world indices as would be seen in the course of the day. Mostly factored in yet uncertainty would remain. If nothing unexpected occurs we would see a consolidation pattern firming up and may be a time to check for low volume and reducing volatality as that would give clue for next break. meanwhile Watch FIIs.

Pankaj

hi pankaj,
inflation, oil on boil, middle east crisis and what not. its very easy during these turbulent times to say the market will crash.

but good to see my friend, yours opinions differs from the crowd. and as they say in the market "majority is always wrong".

i have seen the market at its worst. and i have seen how the market braved the worst.

cheers,
jdm.

HI

So finally BOJ has increased the rate by 0.25%.

Let us see how markets reacts to it.

Pankaj

"Our market has corrected by more than 26%. Some more corrections would be in the offing. The concerns raised above or indicated are related to macro economic performance. Individual stocks always have a chance to perform even in a sliding economy. And ours is certainly not a sliding economy"
hai pankaj,
Our market follows a herd mentality and this has a cascading effect on values of even good companies.The best option at this point is to be 90% in cash and balance in 'A' group shares. The effect of interest rate hike by BOJ, will only be know in the next few days as INFY euphoria will cool down.So traders must stay away and watch.
bye
ravi

Hi Ravi

It may not be best of the trading market but I never talked about trading. That is not my forte. Market always moves up and down on many factors includinh herd mentality. But then not all people make money out of market or out of any enterprise unless they have the knowledge and descipline of the concerned area.

On macro economic conditions long term investment decisions are to be made.The hitch in the present scenario for them is that if it is a correction or start of downtrend..Once market holds in the range and consolidates then we have to watch for any sign of weakness or strength for investment decision assuming that investors would be in cash.
Traders may have to follow their own system which need not factor many other things as they may be concerned only with price volume data.

That is the reason many missed the sign on impending correction or ignored it as FII action was a clear indication well in advance in April. But a long term investor might still be in profit just a little less as stocks have risen more than 3-4 times and this correction would be causing only some loss in that. I don't think I should tell the prices of stocks in 2003 or 2004.The same run may not be there but if economy is growing( and this is what I am arguing) then certainly market will go up . But before that there has to be consolidation and confidence building.

Pankaj

Hi

Today
it was very very low volume and Indices closed in negative territory. FIIs were not far behind

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
14-Jul-2006--- 866.6 ---1293.13----( -426.53)

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
14-JUL-2006 ---- 1029.40--- 1015.30--- 14.10 ----3.10

Derivatives trades by FII
-------------------BUY --------SELL------------OPEN INTEREST AT THE END OF THE DAY



INDEX FUTURES----1215.84----967.37----9557.67

INDEX OPTIONS----165.44----55.67 ----2325.03

STOCK FUTURES ----488.44 ----129.05 ----8241.55

STOCK OPTIONS---0.00----10.43 ----97.63


So In FIIs while they are selling in CM they are buying in Index futures and index options and stock options. Open interest has increased.

Mutual Funds are net seller on 13th July

13.07.06---256.93 ---272.85 ---(-15.92)

Even on a subdued volumes we can see that FII tradings are more than MFs.No wonder they are able to influence stock market in a big way.


DOW and Nasdaq has started week and is sliding further. Already down by more than 1%. The current piece of the villain is low consumer confidence in USA.


Where angels fear to tread (or trade).

Pankaj

Hi jdm

Hope I am not proved wrong. I know its not possible to predict the future but it is possible to project the likely course of action/path taken by the economy.
I am quite optimistic about India not only as Indian but also as a person sensing subtle changes that are taking place.

Thanks for your encouraging words.This forum itself is an example where many minds are able to meet and discuss in an open manner and help each other.

Pankaj

Hi dada,
Is market will fall again? Because of following issues

1. BOJ unexpected intreset rate hike.
2. Reserve bank interest rate and FED next meeting for increasing the interest rate again.
3. Crude oil $78.
4. Inflation is increasing continuously.
4. FII are selling on every high. MF not buying.
5. volume is very very less. on less volume sensex and nifty going up.
6. opening of commodity market.( now investor money will be divided into commodity also). so less money in equity market.
7. Global factor (nikke and dow going down).
7. Cement price is going up.
8. commodity price will go up.

These -ve points are in my mind so i realize market is ready to fall again.

wrgrds
Ahmed

Great efforts .
Keep it up .

Thanks

sachin