Markets retain gains as FIIs infuse $1 b into equities

Markets retain gains as FIIs infuse $1 b into equities
The Hindu Business Line, May 20, 2009, Page 1

Record Rs 1.58-lakh cr turnover amid high volatility.

Our Bureau, Mumbai

Huge trading volumes on Tuesday illustrated that Monday’s stratospheric market rise was no flash in the pan. The benchmark stock indices were maintained at the levels reached on Monday as foreign institutional investors poured in a net $1 billion into Indian equities.

NSE’s cash market turnover at Rs 40,151 crore surpassed the previous high of Rs 28,746 crore touched on November 1, 2007. Its F&O turnover was over Rs 1 lakh crore, at Rs 1,05,985 crore, close to its all-time record of Rs 1,10,563 crore on October 18, 2007.

The combined turnover in the cash and F&O segments on both NSE and BSE was Rs 1.58 lakh crore (against around Rs 70,000 crore last Friday).

The Sensex and Nifty closed near flat after a highly volatile trading session. The Sensex gained just 18 points closing at 14,302. The Nifty closed five points lower, at 4,318.

FIIs were net buyers for Rs 4,793 crore, provisional data on the exchanges showed. Domestic institutions were net sellers for Rs 1,964 crore.

Client data on BSE showed that retail and corporate investors were sellers too, for a net amount of Rs 708 crore.

Trade pattern

The likelihood of another circuit breaker was on everybody’s mind as the opening bell sounded on Tuesday, but that didn’t happen, allowing retail, HNI and institutional investors to trade freely (The Singapore Nifty Futures were up by over 4 per cent at the time of the opening of the Indian market.)

The Sensex opened 456 points higher from Monday’s close (of 14284) as buy orders queued up, after which there was a bout of selling which brought it down over 900 points (from opening), to 13,834.

Brokers said some public sector domestic institutions, presumably instructed to sell, infused some liquidity into the markets. The volatility in the market was unabated after the initial sharp dip. The Sensex surged closer to the 15,000 mark (14,930) at around 1 p.m., also marking an intra-day gain of around 1100 points.

The index dipped on heavy selling in IT stocks; while resumption of buying saw solid buying in realty stocks, said a Sharekhan report.

But the intra-day high was not sustainable due to the profit booking that took place in the last two hours of trading.

The global markets were positive but didn’t have much impact domestically where the markets maintained their own dynamics after Monday’s 17 per cent gains. “The market was very volatile, as there was much euphoria in the market; there was heavy participation both on the buy and sell sides,” Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets Ltd, said.

The advance decline ratio on the BSE (1927:739) and NSE (906:331) was heavily in favour of the gainers. Realty, bank and capital goods stocks gained the most, their sectoral indices gaining between 6 per cent and 12 per cent.

The mid-cap stocks were in the limelight with many registering more than 20 per cent gains. Prominent gainers included India Infoline (25.39 per cent), Aban Offshore (21.54 per cent), and IVRCL Infra (21.33 per cent).

On BSE, many small-cap stocks hit their upper circuits.