Oil inventories slipped a bit as well so there was one fundamental reason but if you look at global equities they are not particularly comfortable. The US financial sectors continues to slip lower and lower, the retail sales data in the US was not very comforting so while nothing dramatic is going on in global equities which is suggesting a one-way 10-15% fall, it still remains quite sluggish the equity environment out there and we have got to wade through that. In the near-term it looks like a bit more headwind building up from the global side.

On inflation:

It looks like it will be closer to 12.2-12.15% is our poll but that should not alarm us because we have crossed 12% in any case. We heard experts yesterday speak about 13% plus before it cools down. I think the market knows that in this 12-13% zone for inflation we will have to spend a bit of time even if inflation has to cool off. So that’s not alarming.

The one thing though is that the whole macro backdrop seems quite sticky; just 10-days back we were all talking about whether things have peaked on the way down with the macros as in oil is cooling off, maybe interest rates are peaking out, maybe inflation will not go any higher and again the more you look at all these data points, you begin to question whether we indeed have seen the worst with the macro situation. I think yesterday Dr. C Rangarajan's red flag about 7.7% GDP his thought that monetary policy will have to tighten further, cannot be ignored for an economist of his stature and it’s the first sub 8% kind of forecast which has come in from a quasi- government institution. Otherwise all government institutions Reserve Bank of India (RBI), Finance Ministry are still in that 8-8.5% kind of zone.

That just reinforces that we are still in a sticky kind of wicket in terms of macros also the bond yields which has eased off to 8.9% thereabouts so lower than 8.9% seem to be finding support out there and they have gone back quite swiftly to about 9.2% kind of levels which is not exactly comforting. I think you need to see bond yields below 9% for equity markets to take some kind of comfort. If it spends time in that 9-9.5% zone that tells you that there are concerns out there with interest rates expectations and with inflation. The equity markets will not breath easy till crude is sub USD 110/bbl and the bond yields are convincingly below that 9% mark.

Even though the Securities and Exchange Board of India (SEBI) meet yesterday was a non-event, some key measures to control price volatility?

While those measures are good and will help a few companies that was not what the markets were focused on. I don’t think yesterday morning or through the last seven days the stock market was focused on the rights issues and Qualified Institutional Placement (QIPs). It was focused on one thing Participatory Notes (P-Notes), is there going to be a relaxation. It was focused on whether shorts will need to square off because of any change in policy on borrowing stocks and shorting, none of that has been touched, it was complete silence on that and that I think might disappoint the market a little bit.

I am not suggesting for a moment that the market opens gap down because of the disappointment from the Sebi meeting but this could have been one potential positive trigger, which could have just tied it over this sticky period for global markets and kept us floating in that 4,500-4,600 zone, so next time when good news came, we could have darted upto 4,700-4,800, which people are talking about. But sadly that has not happened so may be there is one more reason for the market to drift down closer to that 4,400 mark, rather than dart upto more than 4,600 mark on the Nifty and stay there.

The other QIP pricing norms are good news because a number of companies have to differ their or delay their QIPs it’s IDFC, Yes Bank, JK Bank, ABG Shipyard the list is quite significant of companies which have announced QIPs but could not do it because the 6 month average was far too high.

Now I suspect that they will go ahead and do those QIPs. And QIPs by the way now have become far more attractive than any other capital raising- rights of course will improve now but rights is the least favoured option for many companies, unless it is a very large company with a big capital raising exercise but compared to ADRs or preferential allotment, QIPs probably become far more attractive now. So you could probably see a spate of them happening over the next few weeks and months and capital raising will become easier. Thumbs up on that one for sure but I think the market was probably expecting something else, which did not happen.

-Udayan Mukherjee, Managing Editor,CNBC TV18...

The market has been resilient. The Sebi announcement will not make much difference to the market. The markets had moved sideways in the past few days; commodities are up, also global uncertainties have come up again, which is why markets may be sluggish today. The Nifty is likely to drift to sub-4,500 levels today.

Our markets:

It is the last trading day of this week, it is a truncated week and it’s a long weekend we are heading into which might play on the markets mind as we will come back straight on Monday to trade. Added importance is that commodity markets is just beginning to get up its head a little bit and going into a long weekend the market will ponder over that and this morning as we start off we will respond to the non-event the Sebi meeting was yesterday which is another thing that might play on the markets mind

Crude is at USD 117/bbl nearly which is not good news. Global cues are a bit sluggish. Our markets have been a bit sluggish for the last couple of days and let’s see what we can make of it on inflation day and the last trading day of the week today.

Affect of crude on our market:

It is possible and likely that we drift down a bit more. Of course the market has been resilient as one saw yesterday and it’s not falling in line with other markets but maybe there was a bit of hope from Sebi meeting which was built into that as well.

This morning at least the bullish traders will not get in feeling very comfortable because the market has been sideways at best and drifted down in the last two days. Nothing has come out of Sebi meeting which is positive or along the P-Note route which was the expectation, crude is back and commodities have moved up a little bit, global equity markets are a bit uncertain and it’s a long weekend inflation coming in after markets close today.

All of it probably suggests that you could see a two way kind of movement today and I would not be surprised if the markets drifts down somewhat during the course of the day maybe even sub 4,500 but as you can see the dips are being brought, so its not that a Castro strophe is going to happen. Maybe the market will be sluggish today and maybe drift down because of the many cues we spoke about.

Asian Indices:

Asia is a bit mix this morning, no sell offs happening there. The US was a bit subdued, crude has gone up but Asia has not made a whole deal of it and the markets are flattish. On the way up, on the way down nothing has moved more than a fifth of a percent.


Crude and global markets at center stage:

They do, I don’t think our market will like crude back at USD 117/bbl. The key thing to determine right now is whether this is just a technical pullback after a one way slide in crude or whether crude is showing any signs of having put in a temporary bottom around USD 112-113/bbl and is beginning to edge up and settle at a slightly higher range again. I don’t know what is the answer to it because commodity prices are difficult to call but it is entirely conceivable that after collapsing from USD 148/bbl to USD 112/bbl which is a one way move down, a little bit of pull back is on the card.

If one looks at the patterns of the last few times crude has tried to bounce back it has got sold into. So you get those USD 4-5/bbl rallies and everybody thinks its flying again and then crude always goes back and tries to seek a lower low.

So let’s see if its one more those technical pullbacks that is happening right now because if it is and in the next couple of days you see a bump up and takes it closer to USD 120/bbl and then you see another slide back which takes it back to around USD 110/bbl then I think we are okay but if the markets get a sense that USD 112-113/bnbl is it for the moment and crude is not beginning to settle in that USD 112-125/bbl range for the next few weeks, then I suspect that equity markets might begin to sulk a little bit.

So, maybe it’s a pullback because even the currency markets look like they have extended themselves quite a bit on a one way trade and there might be some weakening in the dollar itself in the next few sessions which might coincide with this commodity pullback. It is not just crude, even gold has jumped USD 20/oz, so this has the looks of a technical pullback in the commodity market and no more at this point but we will get confirmation over the next few sessions.

-Udayan Mukherjee, Managing Editor,CNBC TV18...

But we are probably reaching that crux which is around 16,000-17,000 Sensex and closer to 5,000 Nifty. One got to ask oneself that question again that given the current macro backdrop is a whole lot of upside still justified or are we pushing against fair value plus once again in the market after the recent rally.

On Sebi meet:

One should go in with low expectations just for the moment. Lot of expectations are built up that Sebi will throw open the windows and say okay P-Note norms relaxed completely, Sebi says from tomorrow you wind up all your shorts in the Indian market, huge short covering rally, big money gushing in because P-Notes opened up once again, I would be hesitant to expect all of that.

My guess is that one should tone down expectations. Maybe it is the start of a process today which will take some time, maybe does not end with any great P-Note relaxations, maybe the borrowed shorts are closed out over a period of time but not just starting tomorrow. My sense is that yes, some interesting directional moves might be initiated today, maybe more on the short covering side rather than the P-Note relaxation side that is my own feeling. But do not expect magic to happen right now because that is typically how policy moves do not happen.

I would say temper your expectations, expect things to happen over a period of time and maybe not driven to the extent that people are talking about today. But some things could come and that could be taken positively by the market tomorrow morning.

-Udayan Mukherjee, Managing Editor,CNBC TV18...

Given that uncertainty does that now define a more clear range for the Nifty around 4,500-4,700?

Tough call but for the moment, I think we are okay another 100-points on the Nifty is par for the course. We have gone up to 4,600 plus can we get back to 200-points away from there, 200-points moves nowadays are par for the course. As long as long the market hangs around 4,400-4,450 and does not go too much below that, I think traders will be okay.

The inclination right now is that yes, we are in an uptrend a lot of people have missed out on the early part of the uptrend because there was too much skepticism for people to come in and join the party till when the Nifty just got back above 4,000 levels some people bought, other people did not. So they want to buy the dips now. Whether it goes to 4,500 in that 4,400-4,500 zone, I think the first dip will certainly be bought. However, having said that even as the market remains in an intermediate uptrend people are skittish because just three weeks back the market was in the doldrums that memory cannot be erased very easily. So traders will be skittish and while they are prone to trading long right now chasing the intermediate uptrend, I think there is a little bit of a footboard mentality out there. That at the first sign of any trouble or reversal, you should get out of the market.

My sense is as long as we lose another 100-points on the Nifty and no more in this global weakness, we are okay but the moment you get closer to that 4,400 mark and start dipping below that, I think some of the positional traders will want to get out of the market because the appetite for risk has diminished dramatically over the last few months and people are okay in keeping about 150-200 points stop loss and going long on the Nifty because that much volatility is par for the course but anymore and they start fearing that – oh! God this upmove is over and the big reversal has started once again, which is typical of sentiment, which follows a bear market rally of these proportions where people always watch over their shoulder on when the next big downside is going to open up.

So for the moment, I think the dips will be bought but only if the dip is no more than 100-120 points on the Nifty anymore, I think you could start seeing cracks in sentiment.

Do the IIP (Index of Industrial Production) numbers yesterday at 5.4% still build a case as scepticism?

The macro backdrop is weak and that is highlighted once again. There are two ways to look at it; one says, “We have had a nice rally which has got us back to 15,500 on the Sensex thereabouts, so the market is broadly trading close to 16 times.” At these valuations if one assumes that things are slow and sluggish from macro perspective and we do not have great growth numbers at least for the next two-three quarters or three-four quarters, also remember that the interest hike which happened over the last two-three months are not build into the kind of macro growth numbers that one is seeing right now. Those start kicking in maybe after two-three quarters.

it’s conceivable and entirely likely that over the next two-four quarters we have a weakish growth patch here and earnings numbers do not look robust. Does one want to pay more than 16 times for a fairly weakish kind of an earnings growth trajectory which is about to unfold probably starting next quarter? Maybe the answer to that is no and as we get closer to 16-17 PE multiple maybe the market will get the feeling that in this kind of a weakish earnings growth patch or macro growth patch this is how much the market deserves. Does it deserve to go back to 12,000 in a hurry? Perhaps not and to that extent maybe we don’t revisit the kind of flows that we have come in from. But is there a whole lot of upside from here given the kind of macro numbers or backdrop that we are seeing? -The answer to that equally maybe no.

The other way to look at it – if one buys this point of view then the market probably stays in a range with 16,000-17,000 that’s the upper end and maybe 13,000-14,000 as the lower end of the band which is not a bad scenario at all coming out of a vicious bear market of the last seven months if we indeed are coming out of it.

The other scenario is that the market has priced much of it in; it knows what is going to come in the next two-three quarters and it is seeing beyond that and having seen beyond that it’s not in a mood to go back and retest those lows. That’s entirely possible as well and particularly if crude is to cool down as it has. So right now what is played out in the market is an anti-crude trade. Crude is collapsed and therefore equity markets have bounced back.

-Udayan Mukherjee, Managing Editor,CNBC TV18...

Global cues not very supportive, given what happened in the US and hence the mild cut across Asia. But the good news today is 39 more stocks for traders to trade in; the other big news is the much awaited Sebi board meet today.



On trade:

Another trading day after the little bit of a setback yesterday. This morning too the global cues are not very supportive so mild cuts across Asia following what happened in the US overnight. Crude is stuck at USD 113/bbl. The good news is that there are 39 more stocks for traders in the stock future segment and that should make things lively at least from a trading perspective over the next couple of days in many of those midcap names.

That might be one corner of the market quite excitable and the other big news which will probably come only at the end of the trading day today is that much awaited Sebi (Securities and Exchange Board of India) board meeting and what comes through from there.

Lots of triggers for the market today; new stock futures, SEBI meeting but initially in the morning a bit of a setback from the global markets. Let’s see what we make of all of it.

A tricky start to the morning session:

The start might well be tricky because yesterday too we gave up a little bit of ground and today that might well continue, we might give up a little bit more ground and get closer to that 4,500 mark on the Nifty. But sentiment is not terribly bad right now. If you ask people on the street, are they completely running scared right now of a big fall in the market? I do not think that is the case. So generally people are looking at opportunities to go long once again. So yes, the start will be weak but you will see excitement in many of those new stock futures I presume, so the breadth of the market may not be too bad.

As we get closer to the end of the session today, once again expectations from the Sebi board meeting will probably take center stage again. So I do not know might be a touch of volatility after a weak opening this morning but so far this is being looked upon as a retracement to the very sharp rally that we have seen and no more at least at this stage.

Asian Indices:

Asia is not looking very good this morning, in fact sharp cuts in the Japanese and Chinese markets. Japan had bad macro data, so has been pegged back 2.5%. China is still hitting fresh lows out there and the Chinese index is now below the 2,400 mark which is not very comforting. Other markets are okay, not across the board gash across Asia but some markets have been hit quite a bit.

Equation between the euro and the dollar and global equities:

I think that is the all important one we were talking about this yesterday as well, the points that Bhanu Baweja, Head-Research & EM Strategy at UBS, is talking about, if there is a near-term pullback because euro-dollar has come down from 159 to 149, if that goes back to 153-154 as he suggests then I think there is a possibility of commodities bouncing back as well and that might stop the Indian rally on its tracks. Conversely if it is headed towards a one way, towards that 140 to the dollar mark then I suspect that 140 euro to the dollar probably coincides with something very close to USD 100/bbl for crude and that probably coincides with Indian markets at 5,000 Nifty as well.

Depending on which scenario plays out, I think one has a reasonable short of projecting what is going to happen. If it is 140 then I think it is USD 100/bbl for crude very likely then certainly it is likely that we are 5,000 Nifty sooner than one expects. If however this trade that has been around for the last few weeks unwinds and we get back to 153 on the euro, we get back to around USD 125/bbl on crude and we then get pegged back to 4,200 kinds of levels for the Nifty. So that I think is the macro global thing, which is playing out, which is sort of all interconnected as we discussed a while back.

Generally speaking global markets do not seem to have the kind of momentum that India has at this point in time. Most markets are very wishy-washy; Asia is sort of lumbering along. Japan and China are seeing fairly sharp cuts China particularly. It is just a very tepid kind of phrase that global equity markets are going through, India stands out because it has certainly been one of the stronger markets. But that too is linked to what is going on with commodities and that in turn linked to the dollar. So one should keep an eye on those little macros, they will probably determine what happens to us in the near-term.

-Udayan Mukherjee, Managing Editor,CNBC TV18...

We are looking today and analyzing then overanalyzing the crude market with every small inventory figure, what Russia and Georgia are doing, what Iran and Israel are doing but a large part of the crude move also is thanks to the dollar’s recent strength. The dollar was at 1.59 to the euro on July 23 now its 1.49 to the dollar that’s 6.5% and that’s not immaterial; 6.5% on a dollar-euro is a very significant change in a matter of just 15 days or 17 days and that is the genesis of why gold is backed down to USD 820/bbl to a large part is responsible for crude falling off to USD 114/bbl today if not entirely but a large part and that is the trade which is going around. The dollar is snapping back viciously and that’s a long overdue strength or a bounce back in the dollar that’s led off to a sell-off in commodities and that in turn is helping our markets a whole lot.

The question that begs asking is whether this dollar strength against the euro will stop at some point. Does it go to 1.35, does it go to 1.4 to the euro and then does it stop because things are not exactly rosy in the US but this was overdue because the dollar was probably oversold for the last many months. Where does that stop because if you can answer where the dollar stops appreciating, you probably have an answer to where crude starts falling and you have an answer to where our markets will probably stop our rally as well? So we are in a very globally interlinked kind of situation and one has to recognize it for such and as long as this story plays out; dollar strengthens, crude falls our markets will probably continue their rally upwards.



Where do we go from 4,600?



Still looks like we are moving higher up everybody is talking about that range of 4,750 and no more upside from there. I think it would be bad if the Nifty went there and then reversed, markets usually don’t oblige with consensus like that and there is some amount of consensus in the markets that’s the level, where the Nifty might move to and then stop in the near-term. We are already at 4,620 so virtually there and may be today we cover a little bit more ground.



Typically if this is indeed a bear market rally, which we have been talking about because there should not be any doubt that the last 6-7 months what has transpired has been a vicious bear market. If this is indeed one of those strong bear market rallies then they typically end by converting the bears into a fairly bullish kind of a stance. Typically the time the bear market rally would end which is after 25-30% and sometimes 40% is when the bears say okay this was not a bear market rally the bull market has resumed, so we have got it wrong and it is time to get bullish again. And when that conversion happens and people become complacent and bullish and start chasing the market again, is when it turns again.



Many times in history things have panned out like that but if the markets are always different so you don’t know how it will happen this time but usually this kind of rallies do not end, when people say okay this is the line for this bear market rally 25% and after that the market will start falling once again. I don’t think the markets oblige general consensus like that.



So it is entirely possible that since people are talking about 4,700, max 4,800 the market does something different either it stops today and says, “ I am not going to go to 4,800 because everybody expects it and then turns back and gives you a correction deeper than what people expect”. Or the more likely scenario it goes there and then overshoots to an extent, where the bears revisit their views and say may be things have changed, may be crude has come into a bear market which is also a likelihood and therefore the Nifty goes to may be 5,000, may be 5,100-5,200 these are all possibilities because no level is sacred in the market. We keep talking about these levels but there is no line in the sand as such.



The market could easily go to those levels and convert some of the bears and then may be something could go wrong, may be crude in the interim when the Nifty’s rallying does cool off to USD 100/bbl or sub USD 100/bbl. Everybody gets very excited, Nifty darts to 5,100- 5,200 and then just whenever everybody says the bear market is over, may be crude starts flying again and you start getting that big leg down once again.



I don’t know how it will play out it is all open conjecture but it is entirely possible that this rally probably has a kind of room that we cannot envisage from here because 4,700-4,800 is too well out in the open for the Nifty to stop there. If it stops there I think it would be quite surprising.

-Udayan Mukherjee, Managing Editor,CNBC TV18...

Slipping crude remains central cue for markets

Global cues are quiet. Crude is still slipping and it’s now below USD 114 per barrel taking a whole host of commodities with it and that’s the central cue for the markets this morning.



The market is in the midst of a fairly significant up-move from the lows of 3,800 and that will continue. Commodity markets cooling off is lending a bit of a helping hand to the market.



Markets going strong; 21% up from lows in July:



Looks good for a bit more, our markets have been in a perfect inverse co-relation with commodity markets and that is something people were talking about even before crude started slipping that is the key thing to monitor for us and it has played true to form; the more crude falls, the more commodity slips off the better India does.



We have stood out in the last one month as one of the best performers in the global equity markets and that is not entirely unexpected given the way commodities have moved. We have not been so sensitive to other global market movements barring that central one, which is commodities and as long as that is heading down chances are this upmove will continue. It doest look quite spectacular from the lows 21-22% but who is to say if there is not another 5-7-8-10% left in this.



Asian Indices:



Asia is a bit of a mixed bag this morning no great response to crude cooling down some more. Japan is very quite, so is Korea, Taiwan is down a bit, Hang Seng is up a bit and China is stable thankfully after that big drubbing yesterday, not much that we can take away it’s a very mixed bag and even the SGX Nifty is signaling a fairly flattish kind of an opening for us.



Crude is the big cue:



It’s a big cue and it’s not a small cut which has happened in crude. When markets fall more than 20%, in the west they say it’s a bear market and crude’s fallen 23%. So I don’t know whether that qualifies for a bear market in crude and that’s the big question.



While everybody says okay crude will fall and then bounce back but the question certainly deserves to be asked on whether crude is entering a bear market of its own which will have its own rallies but is the peak in place for crude and if the answer for that is yes then a lot of things change for our market as well. But we don’t know the answer to that yet, it’s been a bigger than anticipated fall perhaps but we don’t know whether the peaks have been seen in the crude oil market.



The thing about the crude market and the movements right now us that it’s not stopping at any support level. First we heard that USD 123/bbl was a very important support and it sliced through. Then it was USD 120/bbl, which also broke. Then people said at USD 117/bbl it will stop and it didn’t stop there and now we are talking USD 108/bbl. These are technical levels which keep coming and going and the market is not posing beyond a day or two at any of those levels and that tells you that that market is weak.



These are technicals and I don’t know where crude will finally bottom out and whether it will give us a vicious snap back from there and whether it now starts going into arrange and consolidating in that range and what that range is but that is absolutely crucial for a market like ours.



One can see the signs, just look at the evidence of the last four weeks since the middle of July, India is up 21%-22% but if one looks at the other Asian markets, Hang Seng’s up 4%, the Kospi’s up 5%, China is actually down from the middle of July, its hit a fresh low. So none of the other Asian markets have actually moved higher in this last one month barring with the exception of India and India has a history of the last 6-7 months of being the weakest Asian market along with China.



So, we are centrally linked to crude at this point in time and fairly so because our underperformance has a lot to do with the last 6-7 months. The market is pretty much now saying that, “I don’t care much about Dow and what the Nasdaq does or what the Hang Seng does. I just care about one parameter for the moment which is crude which pegged me back for the first half of the year and if that is going to sub USD 100/bbl, then I am going higher” and that is pretty much the way the market is playing out. So we have to be focused on one parameter and ask those questions again and again, on whether crude’s broken down its bull market or whether it’s too early to pass that judgment.

Is that impacting money supply across the globe?

It is and the most important trade or shift, which has happened globally, which is also affecting crude, is the dollar-euro, is the strength in the dollar. One can’t overemphasize how much of the global financial market shifts are due to because of that one central parameter which is what the dollar is doing.

-Udayan Mukherjee, Managing Editor,CNBC TV18...

Do you know one thing, Udayan sir, our market now trading only on the basis of coming INFLATION figures, this week. A BIG concern. Actually, CRUDE does\\`nt matters. MALAYALI...

Oil inventories slipped a bit as well so there was one fundamental reason but if you look at global equities they are not particularly comfortable. The US financial sectors continues to slip lower and lower, the retail sales data in the US was not very comforting so while nothing dramatic is going on in global equities which is suggesting a one-way 10-15% fall, it still remains quite sluggish the equity environment out there and we have got to wade through that. In the near-term it looks like a bit more headwind building up from the global side. On inflation: It looks like it will be closer to 12.2-12.15% is our poll but that should not alarm us because we have crossed 12% in any case. We heard experts yesterday speak about 13% plus before it cools down. I think the market knows that in this 12-13% zone for inflation we will have to spend a bit of time even if inflation has to cool off. So that’s not alarming. The one thing though is that the whole macro backdrop seems quite sticky; just 10-days back we were all talking about whether things have peaked on the way down with the macros as in oil is cooling off, maybe interest rates are peaking out, maybe inflation will not go any higher and again the more you look at all these data points, you begin to question whether we indeed have seen the worst with the macro situation. I think yesterday Dr. C Rangarajan's red flag about 7.7% GDP his thought that monetary policy will have to tighten further, cannot be ignored for an economist of his stature and it’s the first sub 8% kind of forecast which has come in from a quasi- government institution. Otherwise all government institutions Reserve Bank of India (RBI), Finance Ministry are still in that 8-8.5% kind of zone. That just reinforces that we are still in a sticky kind of wicket in terms of macros also the bond yields which has eased off to 8.9% thereabouts so lower than 8.9% seem to be finding support out there and they have gone back quite swiftly to about 9.2% kind of levels which is not exactly comforting. I think you need to see bond yields below 9% for equity markets to take some kind of comfort. If it spends time in that 9-9.5% zone that tells you that there are concerns out there with interest rates expectations and with inflation. The equity markets will not breath easy till crude is sub USD 110/bbl and the bond yields are convincingly below that 9% mark. Even though the Securities and Exchange Board of India (SEBI) meet yesterday was a non-event, some key measures to control price volatility? While those measures are good and will help a few companies that was not what the markets were focused on. I don’t think yesterday morning or through the last seven days the stock market was focused on the rights issues and Qualified Institutional Placement (QIPs). It was focused on one thing Participatory Notes (P-Notes), is there going to be a relaxation. It was focused on whether shorts will need to square off because of any change in policy on borrowing stocks and shorting, none of that has been touched, it was complete silence on that and that I think might disappoint the market a little bit. I am not suggesting for a moment that the market opens gap down because of the disappointment from the Sebi meeting but this could have been one potential positive trigger, which could have just tied it over this sticky period for global markets and kept us floating in that 4,500-4,600 zone, so next time when good news came, we could have darted upto 4,700-4,800, which people are talking about. But sadly that has not happened so may be there is one more reason for the market to drift down closer to that 4,400 mark, rather than dart upto more than 4,600 mark on the Nifty and stay there. The other QIP pricing norms are good news because a number of companies have to differ their or delay their QIPs it’s IDFC, Yes Bank, JK Bank, ABG Shipyard the list is quite significant of companies which have announced QIPs but could not do it because the 6 month average was far too high. Now I suspect that they will go ahead and do those QIPs. And QIPs by the way now have become far more attractive than any other capital raising- rights of course will improve now but rights is the least favoured option for many companies, unless it is a very large company with a big capital raising exercise but compared to ADRs or preferential allotment, QIPs probably become far more attractive now. So you could probably see a spate of them happening over the next few weeks and months and capital raising will become easier. Thumbs up on that one for sure but I think the market was probably expecting something else, which did not happen. -Udayan Mukherjee, Managing Editor,CNBC TV18...

Yea, that\\`s right, Udayan sir, some things could come and that could be taken positively by the market tomorrow morning. MALAYALI...

But we are probably reaching that crux which is around 16,000-17,000 Sensex and closer to 5,000 Nifty. One got to ask oneself that question again that given the current macro backdrop is a whole lot of upside still justified or are we pushing against fair value plus once again in the market after the recent rally. On Sebi meet: One should go in with low expectations just for the moment. Lot of expectations are built up that Sebi will throw open the windows and say okay P-Note norms relaxed completely, Sebi says from tomorrow you wind up all your shorts in the Indian market, huge short covering rally, big money gushing in because P-Notes opened up once again, I would be hesitant to expect all of that. My guess is that one should tone down expectations. Maybe it is the start of a process today which will take some time, maybe does not end with any great P-Note relaxations, maybe the borrowed shorts are closed out over a period of time but not just starting tomorrow. My sense is that yes, some interesting directional moves might be initiated today, maybe more on the short covering side rather than the P-Note relaxation side that is my own feeling. But do not expect magic to happen right now because that is typically how policy moves do not happen. I would say temper your expectations, expect things to happen over a period of time and maybe not driven to the extent that people are talking about today. But some things could come and that could be taken positively by the market tomorrow morning. -Udayan Mukherjee, Managing Editor,CNBC TV18...

Given that uncertainty does that now define a more clear range for the Nifty around 4,500-4,700? Tough call but for the moment, I think we are okay another 100-points on the Nifty is par for the course. We have gone up to 4,600 plus can we get back to 200-points away from there, 200-points moves nowadays are par for the course. As long as long the market hangs around 4,400-4,450 and does not go too much below that, I think traders will be okay. The inclination right now is that yes, we are in an uptrend a lot of people have missed out on the early part of the uptrend because there was too much skepticism for people to come in and join the party till when the Nifty just got back above 4,000 levels some people bought, other people did not. So they want to buy the dips now. Whether it goes to 4,500 in that 4,400-4,500 zone, I think the first dip will certainly be bought. However, having said that even as the market remains in an intermediate uptrend people are skittish because just three weeks back the market was in the doldrums that memory cannot be erased very easily. So traders will be skittish and while they are prone to trading long right now chasing the intermediate uptrend, I think there is a little bit of a footboard mentality out there. That at the first sign of any trouble or reversal, you should get out of the market. My sense is as long as we lose another 100-points on the Nifty and no more in this global weakness, we are okay but the moment you get closer to that 4,400 mark and start dipping below that, I think some of the positional traders will want to get out of the market because the appetite for risk has diminished dramatically over the last few months and people are okay in keeping about 150-200 points stop loss and going long on the Nifty because that much volatility is par for the course but anymore and they start fearing that – oh! God this upmove is over and the big reversal has started once again, which is typical of sentiment, which follows a bear market rally of these proportions where people always watch over their shoulder on when the next big downside is going to open up. So for the moment, I think the dips will be bought but only if the dip is no more than 100-120 points on the Nifty anymore, I think you could start seeing cracks in sentiment. Do the IIP (Index of Industrial Production) numbers yesterday at 5.4% still build a case as scepticism? The macro backdrop is weak and that is highlighted once again. There are two ways to look at it; one says, “We have had a nice rally which has got us back to 15,500 on the Sensex thereabouts, so the market is broadly trading close to 16 times.” At these valuations if one assumes that things are slow and sluggish from macro perspective and we do not have great growth numbers at least for the next two-three quarters or three-four quarters, also remember that the interest hike which happened over the last two-three months are not build into the kind of macro growth numbers that one is seeing right now. Those start kicking in maybe after two-three quarters. it’s conceivable and entirely likely that over the next two-four quarters we have a weakish growth patch here and earnings numbers do not look robust. Does one want to pay more than 16 times for a fairly weakish kind of an earnings growth trajectory which is about to unfold probably starting next quarter? Maybe the answer to that is no and as we get closer to 16-17 PE multiple maybe the market will get the feeling that in this kind of a weakish earnings growth patch or macro growth patch this is how much the market deserves. Does it deserve to go back to 12,000 in a hurry? Perhaps not and to that extent maybe we don’t revisit the kind of flows that we have come in from. But is there a whole lot of upside from here given the kind of macro numbers or backdrop that we are seeing? -The answer to that equally maybe no. The other way to look at it – if one buys this point of view then the market probably stays in a range with 16,000-17,000 that’s the upper end and maybe 13,000-14,000 as the lower end of the band which is not a bad scenario at all coming out of a vicious bear market of the last seven months if we indeed are coming out of it. The other scenario is that the market has priced much of it in; it knows what is going to come in the next two-three quarters and it is seeing beyond that and having seen beyond that it’s not in a mood to go back and retest those lows. That’s entirely possible as well and particularly if crude is to cool down as it has. So right now what is played out in the market is an anti-crude trade. Crude is collapsed and therefore equity markets have bounced back. -Udayan Mukherjee, Managing Editor,CNBC TV18...

addition of 39 scrips in f&o will trigger 2nd bear rally in market since loss making companies like dishtv ,firstsource,operator driven akruti all this company are going to be added in f&o which will erode investors wealth...

Wow ! You really talk as if Stock markets are a casino and anyone could win depending who has an upper hand. ...