dkishore
08-02-2008, 07:23 AM
It seemed to be another uneventful trading session till noon, when the market was hit by a sudden wave of selling. And if grapevine is to be believed, a prominent US-based FII, recently in the news for huge subprime-related write offs, is reported to have unwound a huge position in Nifty futures which had been created as a hedge for some P-note products that it had issued.
The selling triggered panic among the already nervous traders, and the market never really recovered after that. Market watchers say one reason why the near term trend is likely to be downward, is the lack of enough short positions in the market. Bears have been playing it safe so far, as the bouncebacks following the sell-offs have been equally sharp.
As a result they have been covering up their positions as soon as the market shows any signs of stability. Market watchers say bears are unlikely to go for the kill unless they see signs of trouble at the macro-economic level. Meanwhile, rumour mongers had a field day, which is usually the case whenever there is a sharp rise or fall.
The talk doing the rounds is that a couple of high profile banks were likely to reveal sizeable losses in their derivative trades.
The selling triggered panic among the already nervous traders, and the market never really recovered after that. Market watchers say one reason why the near term trend is likely to be downward, is the lack of enough short positions in the market. Bears have been playing it safe so far, as the bouncebacks following the sell-offs have been equally sharp.
As a result they have been covering up their positions as soon as the market shows any signs of stability. Market watchers say bears are unlikely to go for the kill unless they see signs of trouble at the macro-economic level. Meanwhile, rumour mongers had a field day, which is usually the case whenever there is a sharp rise or fall.
The talk doing the rounds is that a couple of high profile banks were likely to reveal sizeable losses in their derivative trades.