The Indian bourses not only posted their second biggest fall in a single session, but also posted its second lowest turnover in the calendar year of 2008 after February 5. The combined turnover in the cash and the derivative segment of BSE and NSE stood at Rs 54,453 crore on Monday, which is second lowest after Rs 48,783 crore registered on February 5.
According to market watchers, the fall in markets with the lack of volume as well as lack of buying support points towards fundamental weakness. The market, which barely two months ago was trading at an all-time high and was roaring to scale new highs, currently finds no takers at a level of 205 below the peak level is strange.
Sidarth Bambre, derivatives analyst at Angel Broking said, ?The move taken by the FM in the Budget is not very encouraging for the arbitrageurs and more so for the retail segment which constitutes a major part of the arbitrageur community. In already weak markets, the volumes in the derivatives may see a further downfall. However the FIIs would continue to be part of the arbitrageur community as for them the cost of carry ( they may borrow money in some other currency, for example, the yen) is not that high compared to the retail investors. As far as options with greater tenure are concerned, I dont think it will attract so much liquidity?.
The BSE cash segment recorded volumes and turnover of 25.59 crore shares and Rs 5,106.59 crore respectively while the NSE recorded volume and turnover of 48.69 crore shares and Rs 12,574.20 crore respectively on Monday. The NSE?s derivative segment recorded a turnover of Rs 36,592 crore.
Gurudatta Dhanokar, technical analyst and derivative strategist, Almondz Global Securities said, ?The low opening by the markets in the morning and the sustained fall indicates that it is trying to re-check the earlier lower levels tested in January. The reduction in long positions and the build up in the short in the derivatives side has led to huge gap in the price of cash to futures, suggesting the market sentiment is bearish. However, having said that, there seems to be a possibility of a bounce-back in the near future as the dome of heavy-weights like NTPC, BHEL, ICICI Bank and RIL among others, have entered critical support level where the valuations are compelling even for the players within the short- term horizon.?