MARKETS MAY REMAIN RANGE BOUND- GLOBAL DATA EYED

The domestic equity markets settled the futures & options' (F&O) expiry week on a negative note.The Street witnessed high volatility and record volume during the passing week on account of F&O October series expiry.The key indices finished higher on two out of five trading sessions of the week. The cuts on the broader indices were even severe compared to their larger peers. Though Q2 earnings' season has so far remained good for India Inc., the markets that have already witnessed sharp up-move in past two months are looking a bit exhausted for further rally at this point. During the week, only consumer durables and auto gauges managed to show respectable gains while realty,power and public sector undertaking witnessed maximum unwinding of positions from traders.

The markets witnessed a gargantuan turnover of over Rs 2.82 lakh crore in the day's trade which is highest ever in the history of Indian markets while the previous high of over Rs 2.36 lakh crore of turnover was registered on the day of September expiry. The markets also witnessed vast rollovers today in stocks.  
like ABG Shipyard (89%), Orchid Chemicals (87%) and Andhra Bank (76%). Total open interest (OI) for the October series expiry remained around 10% lower than September expiry. On the global front, markets in Asia ended mostly in the positive terrain while sentiments in Europe remained strong as they traded with sturdy gains of over half a percent points. Back home,buying interests in Heavyweights like Reliance, Bharti Airtel and Hero Honda gave some support to the frontline indices while the broader markets proved to be the laggards today. Huge profit bookings marred all the sectoral indices on the NSE, with the Realty index being the biggest loser with 1.99% losses. The India VIX, a gauge for market's short term expectation of volatility, decreased 2.37% and reached 20.52 at close.

Nifty November futures saw an addition of 5.93% or 1.44 million (mn) units, taking the total outstanding open interest (OI) to 25.85 mn units. For Nifty calls, 6100 strike price (SP) from the November series was the most active call with an addition of 1.25 mn or 43.25%. Among Nifty puts, 6000 SP from the November month expiry was the most active put with an addition of 0.81 mn or 19.02%. The maximum Call OI outstanding was at 6100 SP (4.16 mn) and that for Puts at 6000 SP (5.09 mn. The Nifty Put Call Ratio (PCR) OI wise stood at 1.13 for November-month contracts. The top five scrips with highest PCR on OI were Dr Reddy's 2, ACC 1.98, Godrej Industries 1.63, Jindal Steel 0.95 and Aban Offshore 0.76. Among most active underlyings ICICI Bank witnessed an addition of 16.56% in the November month futures contract,followed by Reliance which saw an addition of 1.59% of OI in the near month contract. Tata Steel witnessed an addition of 3.65% in the near-month futures. Tata Motors saw an addition of 2.77% in the OI while Uco Bank witnessed an addition of 3.53% in the near month futures contract.

The coming week will be the eventful one as there are few important macro as well as micro economic events lined up. There will be only four trading sessions next week. The Reserve Bank of India's (RBI) second quarter monetary policy review for FY11 is scheduled on November 02 (Tuesday). The apex bank of the country is expected to go for one more round of rate hike in its policy review to tame spiraling inflation. Besides this, all eyes will also be on the outcome of the Federal Open Market Committee (FOMC) meeting in the US which will be held over November 02-03. The US Federal Reserve is likely to take more monetary easing steps this time to boost the slowing economy. Technically too domestic indices seem to be on the back foot as we expect 5830-5850 could be the crucial support zone. Any drift below this may open the flood gates however next support could be around 5600. On the flip side if support remains Affermative , we might see some more bullishness in the upcoming sessions however 6295 will be very crucial to watch. HAPPY TRADING…..

E-Education Buzz hits the Stock Market

Training institutes that prepare you for engineering and other assorted entrance tests have been around in India and its nook and corner ever since it became fashionable for Indian parents to keep up with the Joneses even on the education front. Amidst this, Career Point witnessed dream listing on the Bombay Stock Exchange. Actually, even better than a dream listing: it rose 104% on the first day of its listing, meaning it more than doubled on the first day. Moreover, the first day saw 15 million shares being exchanged, making it one of the most active stocks on the BSE.

Rajasthan-based Career Point provides tutorial services for various entrance examinations, including the highly competitive engineering and medical exams for admission into India’s premier colleges.

But is this justified? The experts are wary of this development. This means that if you buy the stock at this moment, it is horrendously expensive and you are buying a high risk proposition.

The experts at Mansukh, which provides online share trading services and online equity trading services, warned to be careful about buying the stock. Companies like Career Point and Firstobject Technologies Ltd enjoy a lot of attention due to “an e-education buzz,”, but there was definitely some profit-taking risk with the stock.

How did this happen in a supposedly rational market? Could this be because of some extra liquidity in the market that day? Or could it be because of a boom in online equity trading services in the recent years? Chances are this is because of the buzz around e-education industry today.

One reason e-education companies are at this stage today is because of the hunger of an Indian student to educate himself/herself better – if only for encashing better opportunities in the job market.

For example, world leaders in satellite communication, Hughes Education, have started their India operations in providing education through satellite channels in real time. They have joined hands with big ticket institutes like IIMs, MICA and IITs among others to provide Executive MBAs so that people can work and study MBAs simultaneously.

It is in this environment that Career Point got listed. But it is not even an education institute in the classic sense. It is a tutorial service. Tutorial services business is too localised. For them to go pan-India, it will take some time to establish leadership.

For the present, Career Point has indicated that it intends to utilise the proceeds (Rs. 115 Crore) to meet costs of construction and development of an integrated campus facility and to build classroom infrastructure.

One reason that Career Point is poised for profitability is that it has a franchise-based business model, which will not require significant money to be invested upfront, experts at Mansukh indicated.