Market to remain volatile

The market is likely to edge lower as US stocks tumbled on Monday, 26 November 2007, as investors worried rising US mortgage defaults and credit market losses will drag on the US economy, fueling fears that US consumers will slash spending during the vital holiday season. Volatility may remain high ahead of expiry of November 2007 derivatives contracts on Thursday, 29 November 2007.

 

FIIs made heavy purchases in index-based futures on Monday, 26 November 2007, the day when Sensex had surged 395 points or 2.09% to 19,247.54 on the back rally across global markets. According to data released by the NSE, FIIs were net buyers of index futures to the tune of Rs 2,098.07 crore and sold index options worth Rs 3.35 crore on Monday. They were net sellers of stock futures to the tune of Rs 50.70 crore and sold stock options worth Rs 0.32 crore. FIIs were net buyers to the tune of Rs 2,043.70 crore in the futures & options segment on Monday.

 

In the cash market, FIIs bought shares worth a net Rs 50.40 crore on Monday, 26 November 2007, as per provisional data by NSE. Domestic institutions bought shares worth a net Rs 274.06 crore on Monday.

 

In Asia, key benchmark indices in Hong Kong, China, South Korea, Singapore and Taiwan were down by between 0.27% to 1.57%. Nevertheless, most Asian markets had pared early losses of the day. In fact, Japanese market had turned into green from red. The Nikkei was up 0.84%.

 

The Dow Jones industrial average slid 237.44 points, or 1.83%, to close at 12,743.44 on Monday, 26 November 2007. The Standard & Poor's 500 Index sank 33.48 points, or 2.32%, to 1,407.22. The Nasdaq Composite Index plunged 55.61 points, or 2.14%, to close at 2,540.99.

 

Bargain hunting had triggered a surge on the domestic bourses in the past two trading sessions. Earlier, FII sales caused by redemption pressure in their home countries and fears of a US recession arising from housing slump and credit crisis had spooked stocks across Asia over the past few days.

 

FII outflow in November 2007, till 23 November 2007, reached Rs 4628.80 crore. FIIs had made heavy purchases in September 2007 and October 2007. FIIs had bought shares worth a net Rs 16132.60 crore in September 2007 and Rs 20590.90 crore in October 2007.