Market men will eye the extent of rollover to December 2006 contracts from November contracts ahead of expiry of November contracts this Thursday (30 November). Derivatives positions are quite large. On 22 November, the open interest in NSE’s futures & options segment hit an all-time high of Rs 57,158 crore. The previous record high was Rs 56,991 crore of 27 April 2006. 46% of the open positions are stock futures and 22% are index-based futures.
Meanwhile, large daily FII figures indicate that there have been simultaneous entries and exits. This in turn indicates of different strategies being adopted by various FIIs operating in India. This also suggests churning of portfolios.
On a net basis, there has been stepping up of inflow by FIIs over the past two months. Their inflow totaled Rs 8378.20 crore in November 2006 (till 23 November). The inflow was Rs 8013 crore in October 2006. The inflow was Rs 1145 crore in July, Rs 4643.10 crore in August and Rs 5425 crore in September. The cumulative inflow for calendar 2006 has totaled $8.5 billion. The inflow was a record $10.7 billion 2005.
In the near term, the market would take cue from as to what extent the ruling government is able to pass some of the financial sector reforms. The winter session will debate, among other things, the Banking Regulation (Amendment) Bill, which proposes to increase the voting rights of foreign stakeholders in private banks presently capped at 10%. However, the Left parties are opposed to the amendment fearing that it will lead to a takeover of private banks by foreign entities. The winter session has just begun, and will last till 19 December 2006.
Asian markets were mixed on Monday. Key benchmark indices in Japan, Singapore and Taiwan were up by between 0.4% to 0.8%. Key benchmark indices in Hong Kong and South Korea were down by between 0.2% to 0.5%.
Oil eased back on Monday from gains made late last week. NYMEX crude for January delivery was at $59.55 a barrel, down from $59.90 at the end of an electronic-only trading session on Friday, and London Brent crude fell 29 cents to $59.74.