Market direction post trust vote

CNBC-TV18s Head-Markets Research, Anuj Singhal: The D-day for UPA Govt has arrived. By now, it looks like the Govt. will scrape through and the market has largely factored that in. Nifty has rallied almost 9% in last 3 days and while some of this is attributed to crude cool-off, it will be naïve to believe that politics hasn’t played its part in it.

Now the big question, what happens post the trust vote?

Well, the answer obviously depends on the outcome of trust vote and if as projected by Network 18 and other news agencies, the UPA passes the test, and then there may be a final bout of rally. In the unlikely event of UPA being voted out, make no mistake, market is in for a rough ride as not only will we look at negating the 9% gains of last 3 days but also the sentimental impact will be there. Either ways, I think we will break the 3800-4200 range in the short-medium term

FIIs have net bought over 6000 crores in last 3 days in Nifty futures and while the first 2 days were purely short covering, there was evidence of fresh long creation in Monday’s trade. On the options side, the PCR has flared to 1.3 from sub 1 in 3 trading sessions.

In individual stocks, Satyam is the weakest stock right now, as it is getting hammered not only on futures side, but also on the cash side with trade being marked with very high delivered volumes.

Among other stocks, Indian Bank looked strong while there was short covering in Idea and Wipro.

DISCLAIMER: The author is not allowed to trade in equity markets including Futures and Options. His only exposure to capital markets is via shares of TV18 and Network18 granted to him as ESOPs by the company and investments in some long-term mutual funds.