The markets were range bound and virtually flat for last week. The indices closed with small losses with the BSE SENSEX losing 55.26 points or 0.32 per cent to close at 17,158.44 points. The NSE NIFTY lost 22.15 points or 0.42 per cent to close at 5,205.10 points. The broader indices like the BSE100, BSE200 and BSE500 lost 0.47 per cent, 0.48 per cent and 0.52 per cent respectively. The BSE SMALLCAP and BSE MIDCAP were bigger losers with losses of 0.92 per cent and 1.02 per cent. Amongst the sectoral gainers were BSE FMCG 0.57 per cent and BSE METAL up 0.31 per cent. The losers included BSE REALTY down 2.52 per cent, BSE AUTO down 1.59 per cent and BSE BANKEX down 1.15 per cent.
The top gainer was Tata Communications up 6.58 per cent after the government allowed the real estate of the company to be de-merged into a separate company. The expected valuation of the 773-acre real estate is roughly Rs 7,000 crore or just under Rs 200 per share, net of tax. The other gainers included JSW Steel up 1.59 per cent and Sterlite up 1.55per cent. Losers included PFC down 6.27 per cent, Tata Motors down 5.19 per cent and Maruti Suzuki down 3.29 per cent.
The Indian Rupee depreciated during last week to close at Rs 55.32. FIIs continued to be buyers and bought securities worth almost Rs 1,700 crore on a net basis while domestic institutions were net sellers of Rs 354 crore. Global markets too were range bound with alternate bouts of buying and selling. The result season is on and would pick up pace in the week. Results, which have been declared are on predictable lines with not too many surprises so far. It would be interesting to see how the results in the coming week fare.
The London Olympics begin on July 27 and all the sporting action would be concentrated in London. History says that markets take a back seat when such global events of significance take place. As far as India is concerned there are a few medal aspirants this time in shooting, wrestling, boxing, tennis and badminton. One hopes some success is achieved as it would be a big boost to sport in the country. Events would be followed closely and considering the time difference, it would give the market players the whole day to track the progress of India at the Olympics.
Reliance results were down 21 per cent on a quarter on quarter basis but were marginally better than the street's expectation. Maruti Suzuki has declared a lockout at its Manesar plant after violence took place on Wednesday where the HR manager was killed. The issue is becoming a political battle between Gujarat and Haryana. The Gujarat Chief Minister is expected to visit Japan to meet the management of Suzuki and invite them to shift their Haryana facilities to Gujarat. In a similar move the CM of Haryana is expected to meet the Managing Director of Maruti Suzuki in Delhi. The labour front has become militant and even though there may be pending issues, violence certainly cannot be tolerated. This issue would remain at the centre of discussions for some time.
Thursday would see the expiry of July futures. The level of June series on expiry was at 5,149 and the present level of 5,205 is just about 1 per cent higher. It has been a fairly range bound month so far with the high low range being 5349-5169. The markets have been trading in a narrow range and are waiting for a move, which would breakout or breakdown from the current range. Nothing much is likely in the current week and important levels to watch out for would be 16,950 and 17,350 on the SENSEX and 5,140 and 5,275 on the NIFTY. These levels need to be broken and trade above or below them for any meaningful movement next week.
By the time you read this article the new President of India would have been elected in Pranab Mukherjee. One hopes that the UPA government is able to now start the much-needed reforms crucial for kick starting the economy. There have been new adverse developments with the NCP and TMC upping the ante over the weekend. Nothing happens overnight in politics and it takes time to do or achieve anything. One hopes that this issue does not become an excuse for delaying action on reforms.
The IPO from VKS Projects which had issued 1 cr shares at a price of Rs 55 listed during the week. The share has been trading for three days at the end of which it has closed flat. Shriram Transport Finance is tapping the markets with its bond issue for Rs 600 crore in two durations of 3 and 5 years. The coupon rate is 10.2 per cent and 10.5 per cent with an additional coupon of 0.9 per cent, available to individual holders on the record date. Considering the poor returns from the market, this looks an attractive coupon and being a traded instrument offers decent returns with liquidity.
The BSE SENSEX in the week ahead has support at 17,100 points, then at 17,025 points, then at 16,955 points and finally at 16,745 points. It has resistance at 17,245 points, then at 17,305 points, then at 17,391 points and finally at 17,585 points. The NSE NIFTY has support at 5,188 points, then at 5,147 points, then at 5,115 points and finally at 5,074 points. It has resistance at 5,230 points, then at 5,271 points, then at 5,305 points and finally at 5,340 points.
Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd. Readers are invited to read more about these and other issues on his website http://ak57.in
Disclaimer: No financial information whatsoever published anywhere in this newspaper should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is for educational and information purposes only and under no circumstances should be used for actual trading or making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment or trading decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at his or her risk.
The Indian Rupee depreciated last week, to close at the figure stated above
History shows that markets take a back seat, when events like the Olympics take place
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