The current weakness in our markets is in tune with the global weakness caused due to raising inflation and crude prices, simultaneously our markets have an in built overhang of "ODIs" which were the participatory notes, issued to unidentifiable clients, which need to be wound up over a period of 18 months commencing from October 2007, as per the permission given by SEBI at that time. These instruments issued by registered FIIs need to insist on disclosure of clients, or otherwise, they can directly register with SEBI also for investing in our markets.
Therefore, the option available to investors came through participatory notes issued prior to September 2007, is only to liquidate the underlying equity holdings, in case they do not wish to be registered with SEBI. This overhang of outstanding ODI also is causing more pain for our indices, and at every raise in indices FIIs are liquidating the positions.
Nifty is unable to stay above 4500 today till now, and sensex trading below 14800 shall bring more downsides to our markets in the days to come. The low of sensex 14677.24 made on 18.03.2008 is the last hope for now. How the indices close today will be interesting for technical analysts!
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