Weakness may continue

F&O OUTLOOK

Foreign institutional investors (FIIs) hold a key position in the overall well-being of the markets, as they make up about 70 per cent of the market-wide open interest position.

The FIIs' open interest in stocks and futures has been higher at Rs 30,338 crore, which is 83.1 per cent of the futures OI of Rs 36,500 crore. The FIIs held on to their positions last week despite the Sensex losing over 450 points. Though they were net sellers in index futures, they kept their stocks position untouched. This indicates that though the overall market may see a decline, there could be stock-specific gains.

For the second consecutive week, the Nifty managed to bounce back from its 200 days' moving average. It must be noted that once the Nifty lost support at 3,620, it remained below it for most part of the session signifying its importance. A fall below 3,570 may see the bears becoming more aggressive. On the upside, crossing 3,620 convincingly will be the first step. Only, a move beyond 3,720 may trigger short-covering. 
 

F&O SNAPSHOT
	Turnover (rs crore)*		Open int ('000)**
	Mar 09,07	Mar 16,07	Mar 09,06	Mar 16,07
Nifty	104878.5	86412.86	80337	88033
BANKNIFTY	283.67	362.17	157	245
CNXIT	31.39	23.11	19	17
Stock	67489.85	56517.37	1101895	1124972
NSE total	172683.5	143315.5	1182409	1213267
*Weekly aggregates notional Value, **In shares

Analysts predict that weakness in the market may persist for another one or two months, with the S&P Nifty likely to test 3,500 and 3,420. Last week, more levels were broken intra-day, which confused analysts. At one point, the intraday charts looked bullish and then broke the 3,590 level in the futures.

Despite an intraday technical bounce, markets failed to sustain above this level, even as more positional shorts were initiated.