Street signs: Nifty may approach 11,700, arbitrage schemes, and more

Nifty may approach 11,700: Analysts 

The benchmark Nifty is expected to make positive strides, if technical analysts are to be believed. Most analysts say the momentum looks positive with the Nifty forming bullish pattern on weekly charts. The 50-share index on Friday gained 71 points to end at 11,306. Analysts say if the Nifty manages to cross 11,350-11,400 levels, it could quickly move towards 11,600-11,700. On the downside, the index has support at around 11,200 levels. “We expect the overall trend to remain positive until Diwali,” said an analyst.

Institutions eye arbitrage schemes 

Arbitrage schemes, which have seen a steady trend of investor inflows in the last few months, is likely to become a larger category, with institutional investors also expected to move a share of their funds towards these schemes. According to industry experts, various restrictions put on liquid schemes could lead to slightly longer-tenure money moving towards this category. "On a post-tax basis, the returns generated through arbitrage schemes could be higher, especially when the markets are volatile," said a senior executive of a fund house. Typically, these schemes try to gain from the difference in prices between the derivatives and the cash segment of the same security. During volatile market conditions, the spreads tend to widen. "Fund houses are likely to launch arbitrage schemes, so that they can grab a share from this shift in institutional flows," the executive added.

Investors not warming up to UPI yet

The capital markets are yet to warm up to the use of the unified payments interface (UPI) introduced for initial public offerings. In the recently-concluded IRCTC initial public offering (IPO), only 14 per cent of retail applications came through the UPI mechanism. And a significant portion, almost 45 per cent of the applications had to be rejected on account of procedural lapses. Market players said investors who used to apply through cheques for IPOs are finding it difficult to adapt to the UPI mechanism. "Most investors are furious as they have lost out on allotment due to failing to get a grip of the new payment system,” said a banker.