Markets trade record volumes of Rs 157,891 crore

After a “forced holiday” yesterday due to two circuit breakers, traders rushed back to the market today. The result: Record combined volumes in the market.

Markets reported their highest turnover of 157,891 crore. In the cash segment, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) recorded turnovers of Rs 40, 122 crore and Rs 11,781 crore, respectively. In the futures and options (F&O) segment, the NSE recorded the highest-ever turnover of Rs 105,986 crore.

The previous highest turnover was Rs 149,505 crore on October 17, 2007. This was reached immediately after the then Securities and Exchange Board of India Chairman M Damodaran issued guidelines for phasing out participatory notes (P-notes).

The BSE Sensitive Index, or Sensex, opened at 14, 757.82 points, but slipped immediately. In the afternoon session, there was a sharp movement and the index hit the day’s high of 14.930.54.

Market participants said there was initial buying from traders and institutional investors who had to do short covering because of margin calls after yesterday’s sharp spurt in share prices.

In the afternoon, institutional players, especially insurance companies, stepped in to do some profit booking. This led to a sharp fall. The Sensex closed flat at 14,302.03, up 17.82 points, or 0.12 per cent. The CNX Nifty closed down marginally at 4.70 points, or 0.11 per cent, at 4,407.82.

“Short covering and buying by FIIs propelled the markets in the afternoon. The markets remained flat as most retail investors were booking profits with every rise,” said V K Sharma, head (research), Anagram Stock Broking.

According to provisional data from the BSE, FIIs bought shares worth Rs 4,792 crore. Domestic institutional investors sold shares worth Rs 1,964 crore.

The US market rallied yesterday on better-than-expected results from home improvement retailer Lowe’s which reinforced hopes that the recession is easing. The Dow Jones closed up by 2.9 per cent. S&P and Nasdaq closed higher by 3 and 3.1 per cent, respectively.

The Asian market responded well to the global cues. The Hang Seng and Nikkei rallied 3 per cent. The Strait Times surged 4 per cent.

In India, the realty index rose 12.80 per cent. That means that in the last two days, the realty index has risen a whopping 36.25 per cent. Both Bankex and consumer durables index were up 6 per cent.

However, the information technology index lost 10.10 per cent because of the rupee appreciation. A strong rupee will adversely impact the IT companies’ rupee revenue. Most IT companies have already hedged their dollar receivables.

DLF rose 19.5 per cent today. It has risen 45.40 per cent in the last two days. Reliance Communications and SBI rose 12.9 per cent and 12.7 per cent, respectively.

“Considering the first two days of trading, the sentiment in Indian markets looks decoupled from the global markets. So, amid volatility, markets will be driven by domestic sentiments. Going forward, FIIs will increase their investments as compared with what they have done so far on an average basis,” said Anil Ladha, head (capital markets), ICICI Securities