The Crash( 17.5.2006) and FII activities since then

[pkjha30]

Hi Pankaj,

Congratulation on ur 1000th post and I need to cover lot of posts now. By the way, I am back again.

Will come up with lot of doubts as usual.

Regards
Raj

Hi Rajesh

Thank you very much raj. Welcome back again. I was wondering which corner of the world you were visiting.


Pankaj

 

[pkjha30]

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

Hi Murthygaru

Thanks for kind words. Your encouragment has meant a lot to me.

I am not a senior but a proud member of this forum. Seniors like you, SAINT and Amit among others are seniors not by virtue of numbers of posts but by the quality of their postings, clarity of thought and exceptional command over the subject , though they may be from diverse background( not necessarily from trading background)

I hope dlc will serve most of the data acquisition and conversion needs and your contribution is no less in that. I would say it is a joint effort .

Regards
Pankaj

 

[pkjha30]

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.

Hi Amit Thanks a lot. I am missing your posts and more so your absence.
Your presence means a lot for the morales of new members.I was always reading some good steals and nifty fifty. As long as market is there, these topics will remain evergreen.

I hope we pick up the lost thread in some ways.

Pankaj

 

[pkjha30]

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 rheinu

Thanks a lot. your appreciation is more important then the effort and sacrifice.

Pankaj

 

[sachinc]

Dear Pankaj ,

Congratultions for u r 10 th century (posts). Great efforts.

Thanks

sachin

 

[pkjha30]

Hi Sachin

Thanks a lot .

Well Nifty closed at 2993.65 down by anothe 0.65% on the top of yesterday's fall.

FIIs were all along selling this month so far.

NSE data for FII
FII trading activity on NSE and BSE in the Capital Market segment(In Rs. Crores)
Date--- Buy Value--- Sell Value--- Net Value
18-Jul-2006--- 801.62--- 1249.12---( -447.5)

Adding it with total for july FIIs are net seller by Rs.1100 crs. A huge sum.

SEBI figure for FII

Reporting Date ---Gross Purchases(Rs Crores)--- Gross Sales(Rs Crores)--- Net Investment (Rs Crores) ---Net Investment US($) million at month exchange rate
18-JUL-2006 Equity 764.80 1332.40 (567.50) (123.20)

FII derivatives data from SEBI
------------BUY --------------SELL ------------OPEN INTEREST AT THE END OF THE DAY

INDEX FUTURES---934.16----1666.90----9101.67

INDEX OPTIONS ----186.76----79.39----2107.75

STOCK FUTURES---356.46-----373.79-----8864.61

STOCK OPTIONS ----9.09----4.19 ----84.06


So they have sold Index futures for another Rs. 639 crs. This itself indicates that more weakness is in the offing.

Today market breadth was negative
Advances 189
Declines 712
Unchanged 30

Volume was more than yesterdy's at Rs. 5578crs..Nifty exhibited marked weakness and was volatile. throughout the day.

I am enclosing bulk deal data since first of May 2006. May be this will throw some light on the Buy and sell activities in the context of Stocks. I would request members to analyse and post comments.(change .txt to .csv to view the file in excel.


Mutual Funds were net seller yesterday
date----buy------sell---------net
17.07.06---242.55 ---280.81 ---(-38.26)


On global front

There were mixed result. Sentiments are negative. Some indices in Asia pacific ended in green especially Indonesia and Malesia. Latin America was in Green. Europe was also largely green. Those indices didn.t show any strength and ended in green on account of some results for indes companies.

Nikkei was the start performer of the day. It made a bungy jumping of 2.75%(408 points down).

Seoul followed closely by another 1.73%.

Tension with DPRK (North Korea) on account of Missile test is taking its toll on these two markets. BOJ has done its bit to give it as well as world indices a shove by increasing the rates. FED is likely to complement them on it and Bernanke will challenge them by another 0.25% hike on Aug 8th.

So the negative sentiments are quite likely to continue.

This gives credence to the idea that market will try to test the bottom.I remember a scene from some villages during summer seaon when pond used to run almost dry. Locals will gather and make easy catch of hapless fishes and feast on them. Another scene was during flood times when river fishes used to be caught at villgers doorsteps. So intelligent people would thrive be it summer(bears) season or Monsoon(bulls) season.

When bottom becomes clearly visible there will be lot of fishes to catch .On a long term basis a downtrend in the market gives an excellent opportunities.

Has it come now? We should look at the sensex and see that is is still not near the bottom from where it started its journey to Mount Everest.However if sensex sustains its level of 9500 the it will be still in the range of 9500-11000. If it goes below that then 8500-1500. 8800 is the level where we might see panic setting in.

However, that day is yet to come and we are still in consolidation phase between 9500-11000.Between these two figures we will see lot of stocks changing hands from weak hands to strong ones and supply would dwindle slowly.


Yesterday, I told that EM funds abroad collected arount 1.0 billion dollars.It will come into market by october By that time more money will be collected. As EMs decline it might become more attrctive to FIIs.

lets face it. If they are not buying or if they are exiting we have to be content with Sub 10k play field unless of cource India shows extraordinary pace of growth with good corporate results. This will attract FIIs.


What abt FROGs? Analysts have so far indicated that Latin American Market as likely beneficiary. Indian Market has proved to be most volatile. Therefore they would like it to settle down before any appreciable inflow kicks in. My gues says that if market has to bounce back in October FII buying will kick in slow quantity in September and may be after mid August.

So what. Wait and Watch.

Pankaj

 

[pkjha30]

Hi

Here's Today's data for FII from NSE

FII trading activity on NSE and BSE in the Capital Market segment(In Rs. Crores)
Date--- Buy Value--- Sell Value--- Net Value
19-Jul-2006--- 1262.25 ---1329.17--- (-66.92)

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
19-JUL-2006 --- 917.40--- 1224.50 ---(307.10) (66.70)

FII Derivatives data from NSE

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

INDEX FUTURES--- --- 1071.46---1139.79 --- 9362.44
INDEX OPTIONS --- 40.37 --- 21.19 -----2077.68
STOCK FUTURES---490.16 ---- 402.21 ----8734.98
STOCK OPTIONS --- 6.26 --- 1.54 ---- 75.88


Mutual Funds were net purchaser on 18.7.2006 by Rs. 142 crs.

FIIs are heavily in to selling though net selling today was less then what could be expected , only Rs. 67 crs. This didn't reflest that in a day when turnover was Rs. 5946 crs FIIs sold about Rs. 1339 crs. while buying Rs. 1262 crs.

The global sentiments are negatives with Merril Lynch report painting dark days ahead. Usually such interested reports are immediately discounted by the market.

Asia pacific presented a mixed picture with China and India leading loosers pack. Winners were just by a whiskers margin.

Europe was entirely in green with FTSE recording cool 1.67% gain.

DOW and Nasdaq are jumping with joy as some comments from Bernanke hints rate pause.This is what is attributed to him
"Federal Reserve Chairman Ben Bernanke said he saw core inflation moderating in the coming quarters."

Now to recapitulate why world market is down:-
1. rate hikes by central banks
2. oil prices
3. corporate performance
Investors have taken money out from stock market and have not invested elsewhere. So they are in cash and in wait and watch mode.Why they are waiting? Because they believe that stock markets have delivered better performance over long term than any other asset class. They have also seen that every correction and bear market presents the opportunity to invest and make more money.

Any hint of good news will trigger the rally , if the markets have hit the bottom.May be some rallies will form part of correction and consolidation before market goes into rally.
What could be good news. Rate hike pause.Solution to middle east crisis, better corporate performance.

What abt local factors. Mansoon and growth in Indian economy.

Market has been on a down swing fro last four days. Tomorrow it may break the fall and go up. But that would be time to watch it from the sidelines only for a long term investment.

Pankaj

 

[engel]

What is the significance of this news piece? ENGEL
Link is given here;
http://www.nydailynews.com/business/story/436436p-367732c.html

Stox surge on Fed chief's talk



By MARTIN CRUTSINGER
THE ASSOCIATED PRESS


Fed chairman Ben Bernanke assures investors with remarks to lawmakers that the manageable econ slowdown would help ease inflationary pressures.

Fed chairman Ben Bernanke signaled he may take his foot off the economic brakes soon, sending stocks soaring.
Bernanke told Congress he believed the economy was slowing to a more sustainable pace and the slowdown would help to lower inflationary pressures.

Over the last two years, the Fed has gradually pushed interest rates to a five-year high in an effort to keep prices under control.

"The anticipated moderation in economic growth now seems to be under way," Bernanke said in delivering the Fed's twice-a-year economic report to Congress.

That was just what investors wanted to hear. The Dow surged 212.19 to 11,011.42.

Philip Morris parent Altria was the only one of the Dow's 30 stocks that didn't rise yesterday.

Meanwhile, the S&P 500 rose 22.95 to 1,259.81, while the Nasdaq was up 37.49 at 2,080.71.

The comments were particularly reassuring after the Dow fell over 300 points last week as investors became unnerved by events in the Middle East and higher oil prices.

The rally came despite the fact that the Consumer Price Index for June showed that core inflation, excluding energy and food, rose by a worrisome 0.3%. Over the past three months it is up at an annual rate of 3.6% nationally, far above the Fed's comfort zone of 1% to 2%.

Bernanke did say that the recent rise in inflation "is of concern," but he noted the central bank was looking for inflation pressures to ease.

He said rising energy prices and a slowing housing market were cutting into consumer spending, which accounts for two-thirds of total economic growth.

But he added that the slowdown was being cushioned by strength in business investment on new buildings and equipment.

Bernanke told lawmakers that inflation has been slightly higher than the Fed anticipated when he delivered his first economic report to Congress last February, only weeks after he succeeded Alan Greenspan as chairman of the Federal Reserve.

Still, Bernanke was upbeat about the coming months.

"In the absence of significant unforeseen developments, the economy should continue to expand at a solid and sustainable pace and core inflation should decline from its recent level over the medium term," Bernanke told the Senate Banking Committee.

Bernanke's remarks in early June calling a rise in core inflation "unwelcome" had sent stock prices plunging as investors feared that the central bank would feel the need to raise interest rates several more times, increasing the dangers of a recession.

Analysts said the Fed's forecast of moderating growth and moderating inflation made it more likely that the central bank will raise short-term interest rates just one more time this year, at the Aug. 8 meeting.

The key lending rate, the interest that banks charge each other, now stands at 5.25% - having been boosted in 17 quarter-point moves from a 46-year low of 1% back in June 2004.

"Investors are happy because Bernanke gave a fairly strong signal that the tightening cycle is just about over," said Mark Zandi, chief economist at Moody's Economy.com. "After the CPI report came out, investors were worried that Bernanke would be much more hawkish about inflation."

Bernanke said he did not believe a recession was a threat and added that the central bank was always trying to balance the risks of raising interest rates too much against the risks of not doing enough to keep inflation contained.

Originally published on July 20, 2006

 

[pkjha30]

Hi engel

I don't beleive Fed is ready yet to pause. What Bernanke testified just gives him some head room to keep the rate hike on. Historically 6% is the high that Fed achieved. At present is is 5.25% so at least three hikes would be on the card.Data suggests moderating growth and increase in inflation, a classic symptom of stagflation, recession. That is what he has tried to dispel.
Just the hint of rate pause could boost the market then think what real pause and reduction in rates would do. By all estimates, by Octobe we will see pause in october 2006 which could be trigger for rally.This is what I have stated in previous post

Investors have taken money out from stock market and have not invested elsewhere. So they are in cash and in wait and watch mode.Why they are waiting? Because they believe that stock markets have delivered better performance over long term than any other asset class. They have also seen that every correction and bear market presents the opportunity to invest and make more money.

Any hint of good news will trigger the rally , if the markets have hit the bottom.May be some rallies will form part of correction and consolidation before market goes into rally.
What could be good news. Rate hike pause.Solution to middle east crisis, better corporate performance.

To get on with our watch

Here's the 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
20-Jul-2006--- 1337.25 ---1180.59--- 156.66


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
20-JUL-2006---- 1324.00--- 1234.10 ---89.90--- 19.50

Derivatives data for FII from NSE

FII DERIVATIVES STATISTICS FOR 20-Jul-2006
------ BUY ------ SELL------ OPEN INTEREST AT THE END OF THE DAY

INDEX FUTURES ----2226.78--- 947.41--- 8962.46
INDEX OPTIONS--- 115.04 ---- 95.50 ----2203.47
STOCK FUTURES ---540.95--- 378.96----9090.80
STOCK OPTIONS --- 3.68 --- 4.53 ---- 79.32

O/I in index futures have declined on the back of buying by FII in indedx futures and Index options and stock futures have increased that too on the back of buying .Yesterday O/I in Index futures was at 9362.44.


What abt our Mutual funds

On 19th July they have further reduced their exposures
Date--- Buy Value--- Sell Value--- Net Value
19.07.06---324.69 ---450.24 ---(-125.55)


On global front Aisa was all green with Sensex leading the pack and Nikkei following suit.Europe was largely green except for FTSE which was mildly red. Latin America and USA have started in red. Dow and Nasdaq are showing signs of bernanke hangover.Opening positive both have slipped quickly into red.

I suppose we would be closely following them tomorrow. and two more months to endure before we could see the light at the end of tunnel. But now it appears that bottom line is being drawn .

Pankaj

 

[pkjha30]

Here's some thing of interest

Emerging-market stock funds attracted more than $1 billion in the week ended July 12, snapping seven weeks of net withdrawals, latest figures from Emerging Portfolio Fund Research showed. Investors had pulled out $16.1 billion from the funds during the seven-week rout, slashing net inflows for the year by half during that time.

Are we still saying that we are not dependent on international investors and FII inflows.
Now a glimmer of hope if our corporate performance keeps pace.
pankaj