Markets to remain Volatile on Friday

Indian Stock Markets are likely to remain volatile on Friday as market participants are yet to absorb the ripples created by SEBI’s proposal to clamp down participatory notes.

Most of the local Stock broking concerns are in a veiw that till the P-Note issue is clear and resolved, there will be no fresh buying from the foreign investors.

Finance Minister P Chidambaram, Speaking at an investor meet at New York Thursday,reassured investors that proposed curbs on overseas investments are aimed at moderating the inflows and not a ban on funds. The Securities & Exchange Board of India will meet  on October 25 to decide new rules to limit the use of offshore derivatives to invest in Indian stocks.

On Thursday the Foreign institutional investors pulled out Rs 1130.59 crore from the markets and the Domestics Institutions in India have bought a net of Rs 96 crore as per the NSE data.

Yesterday Reliance Industries and Wipro Technologies have posted good set of second quarter earnings. It is need to be seen whether it could cheer the market sentiment, which has turned sour on account of the participatory notes issue.

A breach of 5226 levels on Nifty may take it down to 5060 with some support at 5120. Below 4995, the short and intermediate term trend will turn weak. To signal strength in the markets Nifty futures must trade above 5475 and above 5620 to signal bullishness.

It is not advised for the Retail Investors to enter into the markets because of the extreme volatility in the markets.