Ben Bernanke provided a pain-relief tablet on Wednesday, but the wound seems far from healed after seven days of blood-letting, say Dalal St denizens.
Margins on F&O stocks hiked again, to eject punters
MUMBAI: Ben Bernanke provided a pain-relief tablet on Wednesday, but the wound seems far from healed after seven days of blood-letting, say Dalal St denizens.
The Sensex closed up 864.13 points, its third largest in a single day, to end at 17,594.07.
But no one’s betting the ride has turned smooth.
“In the short term, the markets can be under pressure because of global instability,” said Paras Adenwala, chief investment officer (equity) at ING Mutual Fund.
The Dow Jones on Wednesday started off dropping 2%.
Margins on various F&O shares have also been hiked, some to ridiculous levels of 130%, as in the case of Sasken Communications. Meaning, buying a Sasken contract in futures will cost 30% more than buying it in cash.
Clearly, the regulators want the punters out of a sheaf of over-speculated stocks.
On Wednesday’s upmove, Deepak Jasani, head of retail research at HDFC Securities, said selling pressure from foreign institutional investors reduced in early trade.
“And after two days of relentless selling by margin players, they were also out of the water. This also led to some amount of short-covering (reversing shorted trades, which lift prices),” Jasani said.
The market is still 15.7% off its January 8 peak close of 20873.
“The Sensex could move up 300-900 points from here, correct, then go sideways, and then await fresh triggers,” said Jasani.
A Balasubramanian, chief investment officer of Birla Sun Life Mutual Fund believes severe pain is over.
“In the light of what’s happening globally, there could be some marginal pain. But as far as the local issue of overleveraged positions are concerned, much of the poison is out, and we should expect some stability,” he said.
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