January series worst in 30 months for markets

Down 6.6 per cent; selling pressure might continue

The Nifty January series ended on Thursday with a loss of 6.57 per cent, the biggest drop since August 2013.

Rollovers in Nifty index futures contracts were at 67 per cent levels, in line with the previous three-month average. Market wide rollovers stood at 81.4 per cent, lower than the three-month average of 82.6 per cent.

On Thursday, the 50-share Nifty slid 0.1 per cent to 7,425, while the benchmark BSE Sensex lost 0.09 per cent to 24,470 amid volatile trade. The benchmark indices were trading in the positive territory, but selling pressure in the last half hour in frontline banking and capital goods stocks pulled the indices down.

Banking and capital goods saw weak rollovers and the selling pressure could continue in these sectors in the February series, said experts.

“Broadly, we expect the Nifty to trade around 7,200-7,500 levels, with a negative bias. For the bank Nifty, we are looking at a resistance at 15,600 levels,” said Sahaj Agrawal, deputy vice-president (derivatives research) at Kotak Securities.

“The way things have panned out on both domestic and global front, we’re not going to see overnight reversal in the equity market. It would be better if the Nifty spends some time around the current level and form a base prior to next directional move,” said Jayant Manglik, president (retail distribution) at Religare Securities. He added traders should be cautious and keep their trading portfolios balanced. “The immediate hurdle is at 7,550 level in Nifty, so maintain sell on rise in index till it upholds below this mark.”

The US Fed maintained a dovish stance and kept interest rates unchanged after its two-day policy review meet concluded on Thursday. However, it has kept open the option of more rate hikes this year and said it would closely monitor global growth.

“The Fed’s decision to maintain status quo has given a larger room for RBI (Reserve Bank of India) to consider easing measures and may hopefully slowdown the FII (foreign institutional investors) selloff, which has continued for consecutive days,” said Anand James, co-head of technical research desk at Geojit BNP Paribas Financial Services.

Asian markets ended mixed on Thursday, with Japan’s Nikkei ending 0.7 per cent lower while the Shanghai Composite dropped 2.9 per cent at close. Hang Seng rose 0.7 per cent. The European markets were up in early hours on Thursday after the Fed indicated it would raise rates gradually. However, the key indices were trading down between 0.7 per cent and 1.4 per cent as at 6.30 pm India time.