Badla rates dip to 12 per cent

MUMBAI, NOV 13: Carry-forward (Badla) charges on the Bombay Stock Exchange (BSE) have dropped to around 12 per cent during the week-ended November 13 compared to around 15 per cent in the previous week. Thanks to the fall in outstanding positions and the steady inflow of funds from foreign institutional investors, badla rates have settled lower.

Market players expect the BSE Sensex to open stronger on Monday, though they point out that it will remain range-bound. Neel Dalal expects the Sensex to be in the region of 4600 to 4750. “But if the Sensex crosses the 4750-level, I see a 200-point rally coming.” Though the markets will open stronger, he expects it to remain lacklustre. The markets have seen a surge in FII inflows during November, providing the much-needed liquidity. FIIs have invested Rs 742 crore or $ 171 million in the eight trading sessions during November. This helped the markets to stabilise closing around the 4630-level.

Lower volumes, delivery-based buying, inflow of FII funds and poorlocal participation are some of the reasons for the lower badla rates. The net outstanding has come down by about Rs 200 crore.

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Arun Kejriwal of Woodstock Securities sees the market opening stronger on Monday but anticipates another round of profit-booking by foreign institutional investors. “FII activity will continue though I see them doing the sector-hopping booking profits in one sector and entering another,” he points out.

The rally in the markets, after the operator-driven slump witnessed during the last week of October, has been helped by large liquidity flows. Apart from the FII buying, domestic institutions, especially the UTI had stepped in in a big way. UTI which had collected about Rs 1100 crore from its recent Monthly Income Plan is expected to be active in the market.