15 Dec 2014

Equity markets and oil: down


This was a broadly negative week for equity markets as the oil price continued to sink, prompting an outbreak of pessimistic sentiment about the long-term implications. Indian markets joined the sinking trend with the Nifty giving up 314 points to close 3.7% down at 8224 after trading in a range of just over 4%. Daily trading volumes again exceeded the trailing average at $3.3bn. Foreign institutional investors continued their strong support, buying a net $641mil and domestic institutions joined them on the buy-side, picking up a net $96mil. Volatility moved up as the India VIX traded steadily up during the week from its opening at 12 to close at 14, though that is still relatively low. Market breadth was nearly ten to one on the downside and there was heavy concentration of negative points’ contributions from the IT, Energy and Mining sectors as well as some financial stocks. In spite of the overall negative momentum, Nifty futures closed at a premium of just over 2% to cash. 

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