On the news of UK financial system also facing similar problems haunting US financial sector, lead to steep sell off in our markets along with asian and european markets, which resulted in Nifty and Sensex making new lows for 2008. Nifty bounced from the new low of 3777.30 in the final hours on short covering, as some hope was there on the possible bail out package passage by US congress to night. Sensex touched new low of 12402.84.Today, as the bail out package is declined by US congress US markets have posted one of the largest cuts in recent history. Asian markets are already trading with huge losses, Singapore Nifty futures are currently quoting with a steep discount of 180 points makes a foregone conclusion of weak opening for our indices at the opening. The question is how steep the cut will be and where and whether any buying support can emerge today, and bounce or relief rally can emerge, as indices and stocks are entering oversold territory. The romours that ICICI bank management was also selling the stock, brought it down below 500 and there was some nervousness among retail investors overnight at ATMs cueing up for withdrawing some cash. This feature has become a common scene for the past few years, though the Indian banking system especially ICICI Bank regulated by RBI is well capitalised and not having any such serious problem, excepting that the profitability might affect as they have exposure to overseas investments to the extent of 4.5$ Billion across globe. VIX has closed at 34.90. CBOE index has shot up by 35% to 42.72 suggests the higher volatility to continue in US markets, which affect other markets including india.
Today is the last day of september month, quarter and halfyear where actually some buying or relief rally is expected by me in the earlier posting, hoping that Nifty would close above June quarter closing of 4040. This hope is now belied due to the turn of events, as pessimism is dominating all around the world; Nifty put-call ratio has come to 0.90 is the first sign of market nearing the bottom. Thus, inspite of weak opening of 150 to 200 points down on Nifty some buying coupled with short covering should see markets recover in the later half. One thing is certain that markets will have wild gyrations, as volatility raises, whether 3800 on Nifty and 12500 on Sensex will be held on closing basis need to be watched. Any closing below these levels, will brew some more trouble and panic among our markets too from tomorrow. Nifty broke the lower band of range suggested in yesterday's posting i.e., 3800 intraday yesterday and closed at 3850.55 yesterday. What is in store today cannot be predicted as things are fast changing every minute across globe!
Range for the Day: Nifty might move in the range of 3700 to 4000 today.
Strategy for the Day: Buy Nifty futures at the opening with a stoploss of 50 points below the purhcase price for intra day gains, if one is a very high risk trader.
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