The reasons are as follows:

1. Inflation figures, which are released at around 6pm on Thursday, are 12.43, down from 12.63 previous week. Also, it is much lower than what was earlier estimated (12.82). Also, it will act as a positive signal for investors, mostly in banking and auto sector, which are very sensitive to interest rate and inflation figures.

2. Due to F&O expiry date yesterday, a lot of unwanted volatility was created in the market today. As a result, the market ended in the negative (BSE fell 1.74% and NSE 1.82%). A major reason for this decrease was the volatility created due to F&O expiry. Now that F&O expiry is over (F&O expire on last thursday of every month), the market should resume to its equilibrium level. The fall in market due to derivatives expiry can be validated by the fact that the fall was concentrated in the last hour of trading.

Hence, I expect the market to end higher, lead by banking (and probably auto) stocks.

Current index prices:
Bank Nifty: 5721.15

your argument is applicable to all sectors however

1. The government will announce the preliminary GDP growth numbers for the first quarter of the current fiscal year on Friday. Brokers said a possible decline in the first quarter GDP growth weighed on market sentiment, prompting buyers to take a cautious view.

2. On the global front, crude oil prices continued to firm up for the fourth consecutive day, nearly nudging the $120 per barrel mark on speculation that tropical storm Gustav will be the most damaging since Hurricane Katrina. Analysts expect the Nifty to trade with a negative bias ahewiad near term.

improved inflation hardly substantial it is expected to touch 14-15% still by Nov. so until there is improvement in macro economic picture i don't see these can be reason for upward movement.

however i don't know exact time GDP numbers will be released ..
if it is before market close and good number then i agree that it is buy
otherwise i don't see any reason to but it.

BANK NIFTY 5721.15 5828.00 6112.25 5828.00 6102.05 6.66

Bank Nifty opened 106.85 points up, and then it moved in only one direction, up. It finally closed 6.66% higher at 6102.05 after touching a high of 6112.25.

So, after opening, it further moved up 274.05 points.

i hope u guys know about the bank nifty futures.... use it to take views on this sector and make a quick buck

if the bank nifty opened 100 points up and closed 250 points up, if u would have bought a bank nifty after opening, you could have got (250-100)*50 bucks for an investment of rs 0.15*5500*50

so ur return would be rs 7500 for margin of 41250, which is a return of 18% for one day now guys if u can make such an awesome call every month, it would mean an annual return of over 200%

obvs brokerage etc would hit, but that shouldnt be more than 10% of profits... so work hard and give in more calls...

as to volatility due to expiry and stuff... why is tht so ?? could u please enlighten me....

as we know futures and options expire on the last thursday of the month. Hence, on the last thursday, it becomes imperative for the value of the future to converge with the value of the underlying, and also the value of the option should go down to zero.

Hence, any change in the price of the underlying is instantaneously captured by the respective F&O, and vice-versa.

so how does tht affect volatility of nifty... or are u saying that nifty vol is driven by FnO ?? and btw, futures always track the nifty... though at some premium or discount... and at expiry only non OTM options will track nifty... others will have value zero... so how does volatility increase ??

From what I know, futures price tends to converge with the price of the underlying. So, the inherent assumption that the both are related is verified. I am not convinced as to how does causality come into picture over here.

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