Nifty futures drops on long unwinding

Nifty futures drops on long unwinding
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First Published: Tue, Jan 06 2009. 07 37 PM IST
Updated: Tue, Jan 06 2009. 07 37 PM IST
Mumbai: The benchmark stock index futures on Tuesday ended lower as cautious investors unwound their long positions ahead of the corporate results season set to open next week.
The benchmark January Nifty futures ended down 0.3% at 3,113.20 points, with a slight premium of 0.4 points to the spot Nifty, which also closed 0.3% lower.
“Buying was seen in the first half of the day,” said Yogesh Radke, analyst with Edelweiss Securities. “In the second half of the day, there was a sudden sell-off. Buying in the index heavyweights helped the market.”
Long positions were created in index movers ICICI Bank and Reliance Industries.
Implied volatility had dropped to about 39 from last week’s about-45 levels, and this is expected to ease further in the next couple of days, Radke added.
“However, with the results season, markets may see more volatility.”
IT bellwether Infosys Technologies will kickstart the reporting season with its earnings on 13 January.
“Long views are being taken but, cautiously. There is a positive sentiment after the relief package. But would the sentiment continue, that is the question?” Radke said, referring to last week’s co-ordinated moves by the RBI and the federal government to boost growth.
The RBI on Friday cut short-term interest rates by 1% while the government unveiled plans to raise foreign inflow of funds.
Radke sees crucial support at 3,110 for the Nifty futures with resistance expected at 3,250.
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First Published: Tue, Jan 06 2009. 07 37 PM IST
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