3 Oct 2016

Up and down, but positive

In a kind of 'back-to-school' period, interest-rate bears were disappointed by central bankers maintaining accommodation as the US heads for a least-worst Presidential election, Europe adjusts to Brexit and global growth plods along. Over the past couple of weeks the Nifty has see-sawed in a trading range, closing with a drop of 169 point or 1.9% to 8611, after trading in a 4% range. Foreign portfolio investors were a bit shy in the earlier part but then stepped up, buying a net $467mil overall. Domestic institutions were also net buyers, of $320mil in cash equity. Average daily trading volume was up again at $4.1bn, but trending higher recently.  Market breadth was not great, with advances barely outrunning declines and some random volume spikes. Volatility was low and stable at first, the India VIX trading the 13-15 range before spiking up to 19 in the last couple of days before settling back to close at 17 for a gain of 4 points. Nifty futures had a volatile settlement day before closing at a premium of 1.3% to cash on the new three-month contract.

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