"Sebi chariman's clarifications, relaxations and confirmation that there is no intention to ban "P notes" as being perceived by all, cheered the market participants, and there was a huge short squeeze, coupled with buying in index stocks by fence sitters lead to a remarkable recovery and the strength in the markets was unabated through out the session thus, sensex posted largest single day gain ever, which surprised everybody. Indian markets being high beta one the movement on either side shall always be above normal compared to other markets. Satyam results were above street expectations, and the guidance is aggressive, while larger players like Infosys are conservative. Nifty futures closed at a steep premium of 15 points to the spot in october series and november series are on par, shows the optimism of players, and the confidence of FIIs expecting not serious announcements from SEBI on 25th the 'D Day'.
Sebi chairman's statement that they are not concerned about regulating capital flows, and their main concern is to implement KYC norms only, and the announcement that an individual with a minimum investment of US$ 50 million can also register as FII henceforth, is quite a welcome step, announced after close of market hours, shall encourage proprietory sub account holders to also register as FII direct, reducing the anonymity from majority of the investments, which are a point of controversy and debate for the past 3 years. FII registration procedure and processes will be streamlined and hastened up as informed by the chairman, is a welcome measure, hence, the roll over of positions and investment by FIIs, overseas bodies shall continue and might increase in the days to come.
FM statement that the issue of 'P notes' is important to regulate the capital flows in view of strengthening of rupee is contradiction to what Sebi chairman says; However, as a regulator SEBI is bothered about KYC norms as far as the investments are through proper channels and not from unwanted persons, entities or categories. Now what steps RBI takes in consultation with Finance Ministry when the flows continue and increase in the future shall decide on the movement of the markets, as once for all the issue of "P notes" shall be put on clarity after 25th October' 2007.
US markets were volatile overnight, however, closed in positive territory aping the asian and european markets, however, futures point to negative indication, so our markets shall open positive and move up at the opening, and due to roll over shall be volatile, and profit booking can be expected at higher levels today, a head of expiry of October series and SEBI board meeting on tomorrow.
Strategy for the Day: Tomorrow's derivatives settlement should be positive over previous weeks close and as indices have closed above 5DSMA yesterday, one can buy 5250 calls on weakness and 5600 puts on rallies for quick returns.
No comments:
Post a Comment