Review of Market Volatility

23 Jan 2010
As we said in our yesterday's blogs, Nifty tested its support level of 4950(day's low was 4954) and bounced back from that level to the high of 5077 and settled at 5036.
Nifty January 2010 futures were at 5013.90, at a discount of 22.10 points as compared to the spot closing of 5036. Turnover in NSE's futures & options (F&O) segment soared to Rs 1,32,392.09 crore from Rs 1,11,117.17 crore on Thursday, 21 January 2010.
Pessimistic cues from overseas markets saw the Sensex open 73 points lower to breach 17000 level mark and extend its losses and touch the day’s low of 16608. However, better-than-expected Q3 numbers by Reliance Industries helped the Sensex to recoup some of losses and touch the day’s high of 17000. Of the Sensex’ pack, only three scrips closed higher. The index ended the Sensex 191 points lower. Nifty also broke 5000-level though at the end it closed 58 points lower.The market breadth, the number of advancing shares to declining shares, was fairly negative. Of the total 2,937 stocks traded on the BSE, 2,043 stocks declined, whereas 842 stocks advanced. Fifty-two stocks closed unchanged.
Of the 13 sector indices, only BSE FMCG that surged 1.34% and BSE PSU that rose 0.36% closed positive. BSE Realty (down 1.70%), BSE IT (down 1.61%)and BSE Bankex (down 1.56%) were hit the most.
Now eyes are on the RBI Policy Review scheduled for Friday 29 January. While the market turns apprehensive prior to any RBI Policy Review, the period prior to the Review this time is all the more significant as there are expectations of rate action from RBI. This run-up period to the Review is slightly different from the earlier ones, in that while there are apprehensions of rate hike (s), yield levels have actually eased this week. The background to this is that the market had already discounted the possibility of rate hike (s); in fact in December, there were rumours of an impending CRR hike. This week, sentiments have improved due to the reasons discussed above,`` said Joydeep Sen, VP, Advisory Desk (Fixed Income) BNP Paribas Wealth while opining on the trends of equity market for the coming week (Jan.25 - Jan.29, 2010).
On the expectation of rate action in the Policy Review, the possibility of a CRR hike of 50 basis points has been strongly discounted and some liquidity control measure is due anyway. There could be an announcement on MSS in addition to CRR hike.
Top Updates :
Reliance Industries’ Q3 net up 16%; the stock closes 0.06% lower
ITC’ Q3 net sales brew by 18.7%; the stock jumps 2.13%
Allahabad Bank’s Q3 net down by 6.5%; the stock ends the day 1.5% lower
Fortis Healthcare’s Q3 net profit at Rs12.40 crore; the stock rises 1.97%
HCC’ Q3 net down 36%; the stock slides 5.09%
Hindustan Copper topped the chart surging by 9.99% followed by Idea Cellular (up 7.64%) and NMDC (up 7.00%). Among losers, Punj Lloyd slid the most by 6.28%, followed by IVRCL Infrastructure that fell by 5.64% and Rei Agro that shed 5.34%.
Public sector unit Rashtriya Chemicals and Fertilisers saw the highest trading with over 1.25 crore shares changing hands on the BSE, followed by wind turbine major Suzlon Energy (0.98 crore shares), India’s second biggest realty company Unitech (0.88 crore shares), Ispat Industries (0.81 crore shares) and industrial finance company IFCI (0.59 crore shares).
In the Europen continent, European shares Friday extended steep losses made in the previous session as the threat of profit-hindering regulation continued to drive investors away from the banking sector. On a regional level, the U.K. FTSE 100 index declined 0.1% to 5,331.79, the German DAX index declined 0.4% or 23.81 points to 5,723 and the French CAC-40 index declined 0.3% or 12.65 points to 3,850.