Thursday, October 28, 2010

Dalal Street likely to witness ranged trade

Indian equity markets are expected to trade in a tight range on the F&O expiry day after moving voilently in the past three trading sessions.

U.S. stocks on Wednesday pared their losses in late trading Wednesday as investors recalibrated their expectations for a major bout of easing by the Federal Reserve to stimulate the economy. Expectations are now increasing for the Fed to unveil a program of U.S. Treasury bond purchases of a few hundred billion dollars over several months, an approach in contrast to the central bank's purchases of nearly $2 trillion of bonds during the financial crisis.

Asia mixed on thursday

While Australian stocks shot up one percent as bank stocks spiked up, Japan's Nikkei is down marginally.

F&O Expiry today

It is funny but surprising that the last three days market moves are exactly resembling last month's trading pattern before expiry. We expect extremely ranged trade and neither expect volatility nor big moves.

While 10 pct correction in the markets buzz is again doing rounds, we do not see there is a valid point for correction at this given time. Fresh Inflows are on the cards and Coal India refunds will certainly boost the markets. Orchestrated market moves during F&O do not given momentum or trend indicators. Infact one should not even consider the market mood or trend in the F&O week for trying to analyse short, medium term trends.