25 Mar 2013

The Cyprus India connection

Puny little Cyprus, worth less than a rounding error on Eurozone GDP, managed to revive the Euro’s existential crisis with a jolt this week, upsetting this year’s 'risk-on' mentality and throwing equity markets into a bit of a spin. India added some political uncertainty of its own to the mix, causing the Nifty to shed 222 points to close 3.8% down on the week at 5651, after trading in a range of 4.3%. Daily trading volumes were moderate, at $2.5bn but buying by FIIs was sustained at $129mil as domestic sellers dropped another $143mil. The India VIX traded between 15 and 18 before closing a point higher on the week at 16. Declining shares outnumbered advances by sixteen to one, so it was no surprise to see all the action on the downside: seven counters, worth 29% of Index capitalization caused half of the Index points’ loss for the week. Index futures closed at a premium of 1.3% to cash; the order outlook on the seven big movers was mixed but mostly positive at the close. Read more here.