Reliance ONGC lead the fall - not good sign

Highlights of the day:

1. Given horrible performance of US markets overnight, there was surprising strength in morning and till late afternoon.  To be fair, Asia was not doing too badly.

2. Though we declined in the late session, in the overall picture we and Asian markets are still outperforming.  Not going down a lot does not mean in any way that we are going to go up soon.  In fact it seems more and more that there will be plenty of time to buy over the next 6 months.  Investors can go on summer vacation so to speak!

3. Though I have not done detailed analysis yet, the only reason I can think why we have not crashed like US are two fold: the previous sell-offs on emerging markets in Oct 08 etc were led by redemption pressures on foreign funds.  The current sell-offs by FIIs are not of same variety.  Fiscal deficit, dollar strength, rupee outlook explains some part of it.  But globally, equities are not preferred asset class in these times.  Safety first is the mantra, how else can one explain near zero yields on 3-6 months US treasury bonds?  Stay in cash, period.

4. Though cash volumes continue to be tepid, high NF volumes on down day mean that whatever short covering that happened in morning was reversed forcefully and NF again went into high discount.

5. Reliance and ONGC declined more than Nifty.  Both heavies were somewhat stronger stocks till a while back so if they start to underperform, then Nifty cannot be supported.

6. FII & DII keep doing their tug of war, and FII seem to be winning since yesterday... enjoy!

FII Data,------------
FII 03-Mar-2009 641.28 1382.61 -741.33
DII 03-Mar-2009 904.94 381.37 523.57