Mkt volatility to quieten; to trade in a range

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Mkt volatility to quieten; to trade in a range

It is the last trading day before Christmas and when we come back next week, we will be into the last week of the year. Markets have got in a bit soft in the last few days but we had a reasonably satisfactory close for the market yesterday.

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The liquidity situation has dried out for the moment and that is something that will probably prevent big upsides in the near term because if you just look at the last 10 days data for FIIs, not that they have sold buckets of stocks, but they have just not bought much.

They have sold all of a USD 120 million net over the last 10 days and in the futures market, they have sold about USD 450 million over the last ten days. That is not the kind of selling, which brings the market down to its knees. But sentimentally, it plays on the minds of traders that FIIs for the moment are not buying too much.

They probably feel that December shutters are down now and the buying will come, if at all, in the month of January. So we don't have big institutional flows backing any kind of moves that we want to do or front run at this point. This probably keeps the market sapped of energy. It was quite encouraging to see a lot of mutual fund money getting into the market yesterday. So maybe the view is that things are stabilizing there as well and some of the NFO money is beginning to come into the market on declines in many of the largecap stocks or midcap stocks.

So that is quite interesting and global markets are also pretty much shuttered down for the rest of the year. It is pretty much holiday season across the world and one should not expect to see very sharp movements. It is not like nothing will happen in the market but it will probably be a much quieter and a much range bound for the next one week or so even globally and from a liquidity perspective.