Street signs: FIIs mount bets in F&O, fund managers' contra play, and more

Foreign institutional investors have gone a bit slow when it comes to selling in the cash segment

FIIs mount bearish bets in F&O

Foreign institutional investors (FIIs) have gone a bit slow when it comes to selling in the cash segment. However, they continue to mount their bearish bets in the futures and options (F&O) segment. According to analysts, FIIs have used any rebound in the market to create fresh short positions in indices such as the Nifty and the Bank Nifty. “It is unlikely that the market will see any meaningful recovery going by FII trading pattern in the derivatives segment. Fears of global recession is likely to keep the markets in bear grip,” said an analyst.

Samie Modak

Fund managers’ contra play  

Pharma stocks have been laggards on the bourses with the BSE Healthcare index, declining 15 per cent in the past one year. In comparison, the Sensex has declined just 1 per cent. However, some fund managers are mounting contrarian bets on the sector by using the stock price correction to average their positions. “We believe that the fresh set of concerns hitting the sector such as regulatory pressures and its consequent impact on earnings are transient,” says a domestic fund manager. According to him, most well-owned stocks have already been impacted by similar issues in the past, and with price stability setting in, these issues should not have a lasting impact on the shares.                

Hamsini Karthik

Bottom fishing after poor IPO show

Some large institutional investors are planning to buy shares of Spandana Sphoorty Financial and Sterling & Wilson Solar following their listing this week. Sources say these investors deliberately gave the initial public offerings (IPOs) a miss. “The business models of these two companies appealed to most institutional investors during the roadshow. Despite that many refrained from applying in the IPOs as they expected to get shares cheaper in the secondary market,” said an investment banker. Both companies are expected to list at a discount to their issue price, according to grey market activity. The IPOs of both Spandana and Sterling had garnered a lukewarm response.

Sundar Sethuraman