Dealing rooms have had a nightmarish last one week. The mood is a little cautious. It looks like the sanity is back in the market, at least in the dealing rooms. They are expecting these things to just settle down in the next couple of days and the markets to ease out a bit.
The markets are very light now, so that is not a problem. They just expect this volatility to die down in the next few days once these systematic corrections are over. Volumes are low today. Banks are closed, so pay-ins and payouts have been scrapped today. Monday would be crucial because the pay-ins and payouts of the last two days will be clubbed on Monday. So, that is one key trigger to watch out for, because that will give a clear picture of whether there is still margin pain left in the system.
As far as the institutional activity is concerned, the flows are marginally positive both on the FII and domestic side. The good part is that bank treasuries and large corporate treasuries have started actively buying into largecap stocks at lower levels. That is where there is a comfort among the dealers. It looks like the volatility will just die down over the next few days, once the systematic pains are over in the system.
Source: Moneycontrol.com
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