It was another volatile session out there. But the key takeaway is that it fell but it managed to bounce back. That is what happened yesterday, that is what happened today as well. Intraday there was a bit of a scare, not quite of the magnitude of yesterday, but today at one point the Sensex was down 350 points and then it managed to close just about 70 points down.
So, the bulls are still in control and the bears are trying to claw back, but they still do not have the upper hand conclusively and that is what the screen is telling you. There is volatility but no genuine weakness is flashing on the screen just yet.
So, it is an interesting session. It could be at bit of a crossroads but we do not know whether this is a prelude to a correction just yet or just a violent consolidation phase after which the market will move up once again.
It is keeping us guessing, and both views are being expressed on the screen, which is why you are seeing a bit of volatility and even on the Nifty futures we are seeing discounts and premium, which tells you that there are shorts and longs and lot of covering and fresh initiation of positions, which are going on in the futures market. In fact so much so in the last one hour when the market came back, we saw quite a bit of addition in individual stock futures positions as well, which was quite interesting.
Of course, the day did not start very well today because we came in with the Asian markets in the red and the Hang Seng closed the day about 500 points down. So, there was reason for nervousness, which is why we had that intraday fall. But we managed to claw back and close pretty okay you would have to say at the end of it all.
Some sectors stood out. Power of course because leading up to the Power Grid listing tomorrow, we have had meaningful rallies in stocks like NTPC, Reliance Energy and Suzlon today. Of course Power Grid is expected to list very well.
The grapevine has it that it should be about Rs 80+ on that issue price of Rs 52, which is a very handsome listing, and many other large cap stocks like Tata Steel, Reliance Petroleum, Cipla, looked pretty good.
On the way down, a couple of those heavyweights disappointed today. Stocks like ONGC and ICICI Bank particularly, and of course with the rupee hitting an intraday high of 39.45, techs were also quite subdued.
Real estate has another big day tomorrow. Unitech gets into the Nifty and therefore we have had a meaningful rally in Unitech. It didn’t quite close so well, but intraday there was a big flourish of about 10-11%.
All the power stocks outside the index looked very smart, whether it is PFC or PTC or Neyveli Lignite, and even some of the smaller ones like Indowind looked very smart. There was a listing today from Kaveri Seed; you would have to say it is a good listing, above Rs 200. The volumes were very large in fact surprisingly large given its free float, but that has been the trend with some of these smaller IPOs. Stocks like India Infoline, Deccan Aviation and Arvind Mills also stood out.
Of course the breadth was not great. We still closed with more declining than advancing stocks, and stocks like IFCI, NIIT, Gujarat NRE Coke, UCO Bank, were some of the stocks that sort of corrected today.
But all in all, it is still not breaking down, it is not falling. That is the message you take away. It could go on to correct, but right now the bulls have managed to come back every time there has been a dip in the market. It looks like the foreign money is still coming into the market on every dip.
Let’s see what lies in store tomorrow. With the Power Grid listing and the last trading day of what has been a volatile and interesting week for the market.
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