Mkts to stay edgy feb 08 continue

But like you said the whole problem is compounded with those steady outflows, domestic money is gone down to a drip and that huge ballooning of this counter towards the end of trade that we talk about these days?
Bears are coming back into play; they are the more confident lot now. I was frankly quite surprised to see the FII Index futures position yesterday because they sold not too much just about Rs 500 crore, on a really bad day they could be selling Rs 2000-3000 crore of Nifty futures and remember their discount wide into about 40 odd points by the end of trade yesterday. It looked like it was a day of heavy FII selling on Nifty futures. But it’s not the heaviest number that you have seen.

So maybe the domestic professional investors are also getting a little bearish and beginning to short the Nifty once again that’s not a very happy sign. As you said the FII selling is not abating on a good days Rs 500 crore out and on bad days Rs 1500 crore out. But it is continuously on the sell side barring that one IPO figure which came in.
All of us sit here in Bombay and make assumptions about whose selling and why they are selling, but one doesn’t really know. If we juts talk to some of the guys who are doing IPOs right now, I was talking to the Emaar MGF CEO yesterday and he was telling me that the situation is quite bad in terms of how institutions are feeling about their ability to put in money into IPOs now.

I think there is a genuine problem; people don’t have money, maybe there are redemption pressures, maybe some of the hedge funds are just pulling money continuously out of emerging markets, and one doesn’t know where is coming from but it’s not abating which is not a great sign technically. What the biggest surprise was those nearly 5 crore shares, which got added out of thin air in stock future two days back over the last couple of days. I don’t know where people found the confidence to do that and most of it have got unwound yesterday once again.

Even traders are figuring out that it’s not an easy market to trade and these attempts at conjured confidence are not working. So challenging internals to say the least.

And the last thing you want to hear is the bad news on the macro numbers but how much of a concern is that going to be right now?

i don’t think in itself 8.7% is something that we should be fainting about, its good and most countries in the world will take it with both hands and everybody in the market knows that there is a little bit of slowdown, which is going on. So the number is only a reaffirmation of what’s going on and what people already know but when people see those numbers, they don’t feel good about it. So it’s a good number in itself, relatively speaking it’s a slowdown from the scorching pace that we had set out, so in that relative term, it’s a bit of a disappointment but I think it might just weigh on the markets back because sentiment is quite bad at this point in time.
So one doesn’t need to see any bad macro news and what has happened with the GDP numbers comes after a quarter of fairly lackluster corporate numbers that you have been seeing. The markets will now ask what will happen in the next 3-4 quarters, are we going to see further skids in terms of earnings growth, are we going to see further slowdown in economic growth, maybe next year we land up closer to 8%, is that possible, these questions are bound to be asked at his kind of a juncture and that will not make the market very comfortable.

Its not a bad set of numbers in itself but it will worry the market about what lies ahead in the future and I can tell you that there are some wild rumours, which are doing their rounds about a Friday move by the Reserve Bank of India etc. We have heard this rumours before and nothing has come out of that but people get quite excited but its come to that point where people have started speculating along those lines and quite unexpected lines as well. To cut a long story short the mood is not great on those numbers.