Will markets have another day of consolidation?

Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other CNBC-TV18 anchors have to say BSE | NSE 01/01/70 Are Mutual Funds betting on ?

Futures and Options:

Markets have just been focused on the global money and that has been very strong. But the power of the domestic money is also very strong now, because not only do we have Rs 56,000 crore of open interest in the futures market and a lot of NFO money, which has been raised.

But just look a the funds, which are opened right now for raising money, there is Prudential ICICI, Reliance, SBI, HSBC and Templeton - five big houses are raising equity money now. The evidence of the last few months has been that each of these houses, when they come in with an equity product, raises nothing less than an average of Rs 1500 crore.

So one could easily see these funds between themselves raising a couple of billion dollars in equity money for the market, which will be deployed in the months of December, January, February. So more than USD 2 billion from the FIIs with USD 2 billion from the local money being raised with fresh money, which has not come in. There is a fair amount of cash, which is still lying with the funds, which have raised money in the last month or so.

So you put it together, the liquidity situation is not terribly bad at this point in time and that might prevent any kind of correction because if mutual funds raise so much money and there is a dip in the market, they will jump in to buy that fall and you might not get very dip falls, unless something changes globally and you see some May kind of an effect.