Mumbai, Oct 9: "Good times are here to stay," was how a broker described the current market expectations. With a number of positives on the horizon: Likelihood of a stable government at the Centre, low badla rates on the back of increased supply of funds, FII investment turning positive after weeks of net outflow- market players are optimistic that the higher levels would be sustained during the coming months.With the carryforward rates on the Bombay Stock Exchange easing on Saturday - remaining below the 30 per cent level - against the higher rates what the operators paid during the last couple of weeks, brokers expect the markets to open higher on Monday and also maintain those levels during subsequent sessions with intermitent technical corrections.
According to an analysis done by Kaji & Maulik Securities for the top 50 scrips (by volume), on Saturday the average badla rates were in the range of 28.8 per cent to 29.3 per cent against 31.2 per cent to 31.6 per cent last week. The net demand for funds,however, was almost at the same level as on last Saturday. Against Rs 2,288 crore on October 9, the corresponding figure for October 1 was at Rs 2,361 crore.
According to brokers, a part of the money that had earlier gone into the book building part of the Hughes Software IPO, pushing the badla rates to higher levels during the last couple of weeks, seems to have come back to the system. According to Maulik G Sharedalal at Kaji & Maulik Securities, "It is likely that a part of the substantial amount of money released from the Hughes Software book building process could have added to the liquidity in the system. This has pushed the weighted average rates slightly below the last week's rates though the value of demand for funds was more or less the same."
There is all round optimism about the markets opening on a strong note on Monday. According to a dealer with a city-based broking house, "There is still room left for another 200 to 250 points rally in the Sensex. We can see some corrections coming inafter that."
According to another dealer, the Sensex can see another rally if the formation of the cabinet - which is likely to take place on October 14 - takes place without any hitch.
According to the rumours doing the rounds in the market, on Friday the FIIs have put in another Rs 200 crore in the equities after pumping in Rs 172 crore (net) on Thursday.
However, some market players are cautious after the sharp fall that was observed during the latter part of Friday's trading. On Friday the Sensex had crossed the 5000 mark. The BSE also recorded the highest ever turnover of Rs 3609.23 crore. The NSE also recorded its highest ever turnover the same day.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.