Markets and News!

Global indices are falling, India is also in that list. Last few days saw markets selling off in a big way. 3000 Cr of selling seen in last 3 trading sessions from FIIs things are not looking bright at all. Yesterday’s monetary policy was a non event with everything kept unchanged and the inflation forecasting slightly going up. Globally there are worries but India has its own worries to deal with. Another twist got added to Gujarat elections with forecast now suggesting that BJP will win Gujarat comfortably. Times now and VMR opinion poll that comes just 2 days ahead of the 1st phase of elections suggest BJP winning 111 seats and congress getting just 68. This is a comfortable margin and should make markets happy. BJP’s vote share is likely to come down from 45% in 2012 to 42% now. Congress is likely to go up from 36% in 2012 to 38% now. So, markets can take some heart from it.

IPO News!

On the IPO front, there are 2 IPOs that are running now, Shelby Hospitals which is into the 3rd day of its subscription and it is grossly under-subscribed now. There are 1.45 Crore shares up for subscription and so far just 46% of those shares are subscribed. Retail is highest with 0.7x while NIIs are the lowest at 0.2x at the end of 2nd day. So today is the final day. The lead managers of this subscription are Edelweiss capital, IDFC bank and IIFL holdings. Lot on the plate to deliver. The price band is 245-248 and market lot is 60. My suggestion is AVOID.

The second IPO that is running is the Future Supply Chain solutions. There are 68 lakh shares up for subscription and at the end of 1st day 32% of the shares are subscribed. NIIs subscription is at 18% and QIBs subscribed 50%. We need to see the action today. The price band is 660-664 are many analysts are suggesting that its bit expensive. Today is the most important day. My suggestion is go for it if you are really looking long term.

Futures and Options!

On the derivatives front, things are really ugly. The NIFTY future’s premium has dropped from 52 rupees to 24 rupees this week and that shows the amount of bearishness. On the options front, there is put buying happening at 9900 levels and put shorting at 10000 level. But more calls are getting sold at 10200, 10300 and 10400 levels which is actually pulling the Nifty put call ratio to 1.11 from 1.19 seen at the beginning of the day.

What is the NIFTY strategy for the day?

NIFTY is likely to open flat around 10040 levels and 10020 might act as a support today. This level if it is arrived and sustained should be used as an opportunity to go long. If NIFTY goes to 10000 then AVOID taking any positions. Today it is crucial to protect the 10000 level and let’s hope that NIFTY protects that. Bank NIFTY will see some volatility as its weekly expiry for it.