Financial Woes Rattle - Investor Confidence Call Buying at 4000 Holds Nifty

MUMBAI: Markets tumbled to their lowest levels in two months after Lehman .Brothers filed for bankruptcy. However, markets came off from day's low as value buying emerged at lower levels.

National Stock Exchange's 50-share Nifty closed the day 3.68 per cent lower at 4072. Nifty recovered nearby 100 points from the lows of 3955, thanks to call buying and put writing at 4000 level. The futures provisionally ended at a premium of 21 points.

The September futures price declined 3.6 per cent while open interest added 18 lakh shares. Cost of carry was positive. Given the order book positions, players have squared off shorts and have gone long at lower levels.

Significant amount of call buying was observed from 4000 to 4500 levels. On the other hand, put writing was observed at 4000, 3900 and 3800 levels. However, put buying was seen at 4200 levels. Hence, until Nifty recovers and stays above 4200, bears have an open ground to hammer markets.

All sectoral indices were trailing in the negative. Realty, IT, metal and power were the worst hit.

In stock futures, Reliance Infrastructure plunged 9.13 per cent while open interest added 5.3 lakh shares. Satyam Computers plummeted 9.2 per cent, Ranbaxy fell 5.11 per cent and open interest shed 3.57 lakh shares.

Unitech dropped 7.41 per cent and Tata Communications fell 7.09 per cent. Reliance Capital nose-dived 10.18 per cent, DLF declined 7.19 per cent and Renuka Sugar slumped 7 per cent.

Reliance Industries fell 2.21 per cent, Larsen & Toubro skid 3.92 per cent and Tata Steel slid 4.7 per cent. Reliance Natural plunged 6.93 per cent, BHEL shed 4.11 per cent and Reliance Petro reduced 4.9 per cent.

Stocks in Europe and Asia tumbled Monday and futures on Wall Street and the dollar slid as the collapse of Lehman Brothers and the takeover of Merrill Lynch battered investor confidence.