Rollover/squaring up of positions in derivatives segment has triggered high volatility on the bourses recently. Volatility was immense on Wednesday. The total turnover on NSE’s derivatives segment surged to Rs 46081 crore on that day, the highest turnover this month.
According to dealers, an early rollover/squaring up is happening in derivatives contracts this time as foreign fund managers will be on Christmas and New Year holiday. December 2006 derivatives contracts expire next Thursday (28 December).
As per provisional data, FIIs were net sellers to the tune of Rs 354 crore on Wednesday, 20 December. They were net buyers to the tune of Rs 270 crore in index based futures and Rs 152 crore in individual stock futures on that day.
Strong economic data and reports showing robust advance tax payment by leading corporates may provide support to the market at lower level. Cement companies and oil firms have paid substantially higher advance tax in the third installment of 15 December 2006. State Bank of India, Tata Steel, Reliance Industries (RIL), Hindalco, L&T, and Cipla have paid substantially higher advance tax in the third installment.
FDI inflow in India touched $6.1 billion in first 7 months April-October 2006 period compared to an inflow of $2.6 billion in the same period last year. India’s exports during the 8 months April-November 2006 rose 39% to $79.59 billion.
Asian markets were mixed on Thursday. Key benchmark indices in Japan, Singapore and Taiwan were up by between 0.04% to 0.2%. Key benchmark indices in Hong Kong and South Korea were down by between 0.07% to 0.18%.
US stocks edged lower on Wednesday in light trading as a disappointing outlook from FedEx Corp. pulled down transport stocks and offset the positive influence of the latest round of proposed takeovers. The Dow Jones industrial average dipped 7.45 points, or 0.06 percent, to end at 12,463.87, while the Standard & Poor's 500 Index edged down 2.02 points, or 0.14 percent, to finish at 1,423.53. The Nasdaq Composite Index fell 1.94 points, or 0.08 percent, to close at 2,427.61.
Oil slid 45 cents to $63.27 after jumping to a three-month high above $64 a barrel on Wednesday, spurred by a steep drop in US crude inventories