Today the derivatives series for the month of April heads for settlement. At the start of the series, I had written that April would be a decider, as lots of important triggers were stacked up this month. During the series, the Nifty has soared 9 per cent. In doing that, it snapped out of a long trading range, forced the bears to cover up and marched towards an all time high.
Importantly, the market rediscovered leadership this month. Reliance Industries is up 18 per cent in this series and sectors like metals have had blowout performances. Tisco is up 30 per cent this month and Sail 20 per cent. Even the rate sensitives : banks, autos and realty stocks have posted meaningful bounces. Liquidity, which has been tricky since the start of this year, seems to have picked up again.
From the market's recent lows, FIIs have pumped in nearly $3 billion between the cash and futures market, and derivatives open interest has soared to near all-time highs heralding the return of the trader.
As the April series ends and we head towards May, the domestic triggers will dry up a bit. The monetary policy is behind us though the markets will keep tracking weekly Wholesale Price Index (WPI) inflation numbers closely. A lot of the big results will be out by the end of this week and after that they are too scattered to have any concentrated impact on sentiment. It is down to money flows and global market performance for the next series.
If global markets correct materially, chances are we will as well. Locally, there are the Uttar Pradesh election results. They are not expected to be great from a market perspective anyway,so the room for surprise is minimal.