The Crash( 17.5.2006) and FII activities since then

Congrats,Pankaj!Thanks for all the excellent articles and posts!!

You are now a Super Senior with Saint and Amit.

Anu

Hi SAINT

Thanks for your words of encouragement. You are the leading light of this forum.The clarity and perspective offered by you is an eye opener for me and all the members of this forum.Mine will be in poor contrast and was by necessity posted else I wouldn't dare.

Also thanks are due to Kuldeep, jraj and anupama ,vinsu, ahmed ,czar, agilent, ravi , amit, ashish,munchi among other readers. I am just one among you and putting my ideas from a non market perspective.I have understood one thing ..that is .. market is a complex phenomenon and it is influenced by many factors such as price-volume data, financials of the companies, sectoral outlook, foreign hands and sentiments of the participants etc. I was putting one point across. There are others before one arrives at the decision to invest or trade.

Many many thanks to all of you for giving a patient hearing to my rambling.I can not become super senior like Saint whose brilliance is matched by his modesty.

Well , let us then see if you people still enjoy the FII treat.

Here's FII data for Today from NSE

FII trading activity on NSE and BSE in the Capital Market segment(In Rs. Crores)
Date--- Buy Value--- Sell Value--- Net Value
17-Jul-2006---- 662.5---- 1332.37----( -669.87)

Figure for July is given for perspective.

FII trading activity on NSE and BSE in the Capital Market segment(In Rs. Crores)
Date--- Buy Value--- Sell Value--- Net Value---NiftyClose
03-Jul-2006--- 1330.03--- 1072.48--- 257.55----3150.95
04-Jul-2006 ---1113.58--- 971.52--- 142.06----3138.65
05-Jul-2006--- 1991.58--- 1615.12--- 376.46----3197.1
06-Jul-2006 ---996.51--- 1089.77--- (-93.26)----3156.4
07-Jul-2006 ---934.25 ---1272.01---( -337.76)---3075.85
10-Jul-2006--- 565.48--- 667.67--- (-102.19)---3142
11-Jul-2006 ---784.36--- 935.50--- (-151.14)---3116.15
12-Jul-2006--- 1714.84--- 1439.15--- 275.69---3195.9
13-Jul-2006 ---991.40--- 990.46--- 0.94---3169.3
14-Jul-2006 ---866.60--- 1293.13---( -426.53)---3123.35
17-Jul-2006 ---662.50--- 1332.37---( -669.87)---3007.55
Total--- 11951.13--- 12679.18---( -728.05)


The month started with nifty at 3150 and highest it achieved 3197 on 5th July and then 3195.9 on 12th July . Nifty closed higher on 5th 10th and 12th July. Rest of the days it has closed weaker.

FIIs are now net seller for the month of July and in two days they have sold around Rs.1080 crs and ended net seller by 728 crs.No wonder Market has drifted down. The data points to continued weakness. On the back of low volumes FII selling will push the market towards testing its lows formed earlier in June.

Let us see FII data from SEBI

Reporting Date --- Gross Purchases(Rs Crores)--- Gross Sales(Rs Crores)--- Net Investment (Rs Crores)--- Net Investment US($) million at month exchange rate
17-JUL-2006--- 911.70--- 1255.30--- (343.60)--- (74.60)


FII derivatives data


----------BUY -----SELL----------OPEN INTEREST AT THE END OF THE DAY
INDEX FUTURES---565.50-----1795.28-----9004.96
INDEX OPTIONS----72.21----34.18----2014.34
STOCK FUTURES ----252.02 ----378.68----8919.93
STOCK OPTIONS----0.37 ----0.00----75.26

FII data for derivatives indicates that they have sold heavily( about 1230 crs) in index futures which indicates that they are anicipating weakness
Together they have sold about Rs.1900 crs. A huge amount by any standards.

What abt our mutual Fund friends who are under redemption pressure.

On 14th July

Date---- Buy--- Sell----Net
14.07.06---290.41---314.55 ----(-24.14)


For Month of May , June, July 2006

May 2006---18345.43---10452.07---7893.36
June 2006---7843.52---9820.47---(-1976.95)
July 2006 (upto 14th)---2594.12---3319.64 ---(-725.52)


So In June and July they are net seller.In May they have made net purchases to the tune of Rs. 7893.36 crs and I hope they would be up by 8 to 10% and would be booking profit or losses now throughout this month. They will not help the matter either.


Another point is OIL shock, Israel conflict escalating further, it would only intensify the prevailing uncertainty.Not many people would know that US produces sufficient oil for its domestic consumption and with Iran in its fold, it would be relatively immune form that but oil companies taking advantage of oil price hikes would like to keep up the pressure on consumers.

It means fuel efficient cars would be much in demand so small car Manufactures would be showing buoyant sales going forward. Not to speak of OIL producers and exploration companies. Alternate fuel will be the story but as noted earlier without much substance. Nuclear energy would get a boost. With Civil Nulear coop. deal India would be in a position to capitalise on that. Hydro power--- yes to a smaller extent. Power equipment companies would be benefitted. This may not face much liquidity crisis as to sustain growth rate of 8-10% we would need energy and that can be achieved by this. Railways are using more diesel and I think oil price would give a push for electrification of traction in a big ways over five years.
Finances may be from World bank or IMF or ADB though India has shown less interest in going to them in recent past..

With cost of oil going up, Road transport would suffer and would become costlier. Prices of essential commodities would go up. Cost of finished goods , raw materials would also increase. So inflation would increase but with less liquidity in the system demand would be less adding to pressure on the companies.Hopefully demand for consumer goods may be driven by new markets as established market would tend to spend less. But then FMCG would be under pressure.

Likewise we could analyse each sector and its impact because of twin factors--oil and less liquidity.

The positives would be the higher earnings and better performance by companies. So watch out for them and avoid those which are likely to perform poorly(Underperformer)

This month would be a pointer of things to come in rest of 2006.Market would be in the range of 9500-11000(It failed to break 11000) and once it is going down below 10000(psychological barrier) the lows could be revisited.I have my doubts about breaching that lows but then market should not be predicted.

FIIs are pointing to weak future for the time being. I am of the opinion that wait and watch rather than entering the market. FED Rate and BOJ rate would be adding anxiety.Higher inflation data would accentuate it further as it would increase likelihood of rate hikes by central banks.Higher Consumption and Higher employment would mean similar impact when Idea is deflate.

There is one point I would like to tell here is that this month EM market funds have collected $1 Billion in net inflow but yet to flow into emerging markets. FROGS reports indicate they may be considering Latin American economies and Turkey. However if the net flow to funds continue then by October end these funds will be deployed. So we may see better days ahead during festival season.If that is correct assesment then we may be seeing the bottom in July and August and firm upward movement from Sept-October.

Regards.
Pankaj

champagne....pop....sss

now next target to catch up with nifty, or maybe the nifty will catch up with u

Hi dada,
Congrates for 1000 post.

And thanks for the great word.

Ahmed

Czar,
Even you will agree with me if I say, "Rather the first than the second!"

Thanks a lot.

Hi Kuldeep


Pankaj

Hi Pankaj,

Hearty Congratultions on your 1000 th post. It needs great effort and sacrifice to achive this level. All the best and waiting to see more from you.

rheinu

Hi Pankaj...
I don't miss a single post you put up.
Great going here, you're doing a wonderful job, keep it up, and let the counts roll!!

Warm regards.

Dear Pankaj,

Not just by the no of posts alone, but by the contents also, it's no mean achievement. we have a non-market lateral view of the happenings around by your posts.

one has to contribute with total dedication to achieve another distinction - @ more than 2 posts/day, achieved by only very popular senior members in this forum : what srikanth then and adam gillchrist now achieved in cricket.

your DownloadConverter is the third dimenion to your desire to help others.

may god bless you.
MurthyMSR