The market staged a solid intra-day rebound on Monday (20 November) after Sensex had plunged over 200 points at one point of time. The market sentiment turned cautious following RBI’s circular on Friday (17 November) which capped banks’ exposure to capital market.
Given that built up of positions in futures & options segment is substantial, high volatility may take place in the next few days in the run up to the expiry of October 2006 derivatives contracts on 30 November. There were heavy FII sales in the futures segment on 20 November. FIIs were net sellers to the tune of Rs 1051 crore in index based futures on that day. They were net sellers to the tune of Rs 249 crore in individual stock futures. As per provisional data, FIIs were net sellers to the tune of Rs 300 crore in the cash segment on that day.
FII inflow has boosted the bourses over the past few days. The Sensex is up 43% in calendar 2006 so far. FII inflow in 2006 has reached $7.8 billion (till 14 November). The inflow of funds from foreign institutional investors may pick up further in December 2006 following new allocations.
Asian markets were in the green on Tuesday (21 November). Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.08% to 1.1%.
US blue chips ended lower on Monday as investors sold stocks after a series of record-high closes and a drop in oil prices hit energy shares. The Dow Jones industrial average was down 26.02 points, or 0.21 percent, to end at 12,316.54. The Standard & Poor's 500 Index closed down 0.70 point, or 0.05 percent, at 1,400.50. The Nasdaq Composite Index edged up 6.86 points, or 0.28 percent, to end at 2,452.72. A brokerage upgrade of Microsoft Corp. helped the Nasdaq end slightly higher.
Oil for January delivery ended down 19 cents a barrel at $58.78 a barrel on ample supplies and concern about demand.