Nifty to remain quiet on weak flows

Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other CNBC-TV18 anchors have to say Nifty BSE | NSE 30/05/12 Are Mutual Funds betting on Nifty?

Slipping into the last day of what can be called an interesting week for the markets, CNBC-TV18's Managing Editor Udayan Mukherjee says today too is froth with expectations. "All eyes are set on the unemployment report in the US to be released later this evening."

Hoping to put in a flat to positive kind of a session going into the weekend, he says, "The only problem is that flows have become very tepid for the last few days."
 
Today, he says will be a quiet session for the Nifty.

Here is a verbatim transcript of Udayan Mukherjee's comments on CNBC-TV18. Also see the accompanying video.

Q: The globe chooses to be quiet ahead of that data?

A: Yes, it doesn't seem very ruffled actually maybe we are making a whole big deal of it because there has not been too much volatility leading up to it. Europe's also been quite stable even the cues from the commodity markets are okay, crude of course to some specific issues related to that market is bounced back the USD 75 even the Dollar Index has kept its head down. Some of the macro data which came in yesterday was not very unsupportive from the US market, so we are okay.

The only problem is that flows have become very tepid here for the last few days, it's not a big sell figure or anything that we are getting from FIIs, but generally, we had gotten use to something like Rs 600-700 crore of net cash inflows everyday and that figure nowadays for the last ten days has been sometimes negative, sometimes Rs 100 crore positive. So, global markets remain stabled-they have bounced back. In fact, in the last three-four sessions the US market has recovered all that it lost in the month of August. So it's not been a bad comeback but we monitor flows out here and flows have been a little lacklustre.

Q: What about that big non-farm payroll number?

A: I wonder whether it will be such a big number because if you map expectations the number is suppose to go up by just about 10,000-12,000 or 13,000 so it is not a dramatic number which the street is expecting. Even unemployment might go up. The street is expecting the number might go up from 9.5 to 9.6%. Everyone is walking into that expectation with their eyes open. Unless we get a howler, as in, we get 9.9% unemployment and a very bad non-farm payroll number maybe this event will come and go and we have seen some of these unemployment reports build ups in the past where everybody said this number is a make or break for the market and come Monday it has been some kind of a tepid reaction from the street.

So maybe we are making too much of a mountain of a molehill. Yes, the data has not been supportive-all of us know it. We are not expecting a great unemployment number from there but if it is within the realm of expectation then I do not know whether that qualifies for a massive sell-off in the market. Fingers crossed. We know little about macro data in the US sitting here but for something that is predicted and is expected the chances of huge disappointed are limited to that extent.

Q: What about the Nifty today?

A: It might be a quiet session. There is no reason for us to move because global markets are still stable; we are running into weekend, maybe an important data point. Our markets though have a habit of moving in the last one hour of trade on a Friday pre-empting what might happen in the global markets. So maybe the last one hour could be interesting particularly depending on how Europe opens up ahead of the US market opening today. The first half of the day maybe we start at 5,500 trade in a 20-30 point kind of a band and then take it from there. I think flows have gone down to an extent where the market is robbed of momentum right now.

So you are not seeing those kinds of big moves now because the FII push is not there and domestic institutions are not buying anything. But if you look at the options data and the fact that FIIs opened up fresh longs in the futures yesterday I think the bias is not terribly negative. People believe that 5,350 at least for the near term should hold out. Now the question is whether we can cross this hump of 5,500 to 5,550 on which the jury is very divided.