Long Positions On Bse Shoot Up By 56.88% To Rs 718 Cr
With foreign funds making token purchases at the bourses last week, the operators have once again built up huge positions. The net outstanding position at the Bombay Stock Exchange (BSE) has risen sharply by 56.88 per cent during the past week to touch Rs 718.25 crore.
The outstanding position at the end of the previous week stood at Rs 457.87 crore which had brought down the badla rates to an eight-month low of 8 per cent. The huge build up is despite the additional margins imposed by the market regulator.
While foreign funds have made some purchases, the current rally is mainly on account of speculative purchases.
At the end of the previous settlement (as on July 4), the long outstanding positions had come down sharply to Rs 457 crore from Rs 1200 crore.
However, during the past four trading days of the current settlement, the long oustandings had gone up to over Rs 722 crore. On the last day of settlement, operators have offloaded nearly Rs 4 crore worth of outstanding position.
The sharp rise in outstanding position is mainly because of the low badla rates which prevailed in the previous week. Market players are of the view that the sharp rise in long outstanding makes the current rally untenable at the higher rates.
Also, some fund managers (both foreign and domestic) have decided to invest the cash which they have been sitting on for some time. This propped up trading interest during the first two trading days when indices moved up.
However, with some FII buying coming in, the operators have built up huge positions. The operators have switched their position during the past two days. They have off loaded part of their holding in the software stocks and taken fresh position in Telco and ACC.
"The fact that FII selling has come down is a comforting factor, and this is the main reason for the current enthusiasm in the markets. The figures released by the exchanges clearly show that there is some FII purchases as well but not to the tune that the market should up by nearly 400 points," says a fund manager.