It was all fizzle, no sizzle last week as inertia set the mood
The markets did virtually nothing in the four trading days that we had last week, and, closed virtually flat. The BSESENSEX lost 18.01 points or 0.07 per cent to close at 27,126.90 points while NIFTY lost 5.15 points or 0.06 per cent to close at 8,323.20 points. The broader market saw the BSE100, BSE200 and BSE500 gain 0.03 per cent, 0.095 and 0.15 per cent respectively. BSEMIDCAP gained 0.19 per cent while BSESMALLCAP gained 0.77 per cent. The top sectoral gainer was BSEHEACAR up 2.47 per cent, followed by BSEREALTY 1.52 per cent and BSEMETAL 0.91 per cent. The losers were led by BSETECK down 1.60 per cent followed by BSEIT 1.41 per cent and BSEFMCG 0.76 per cent.
Sailors get ready around an F/A-18E Super Hornet on the US Navy’s super carrier USS Dwight D Eisenhower in the Mediterranean Sea. The aircraft carrier is deployed in support of Operation Inherent Resolve, conducting strikes against terrorist group ISIL in Libya, Iraq and Syria. Increasing terror attacks are denting confidence in the markets. Pic/AFP
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In individual stocks, the top gainer was Vedanta at 5.81 per cent, followed by Lupin 5.75 per cent and BHEL 4.51 per cent. Other gainers included Punjab National Bank, up 11.73 per cent and REC 9.44 per cent. The losers were led by GAIL down 5.01 per cent and followed by Idea Cellular 3.91 per cent and Bharti Tele 3.73 per cent.
Share fare
Dow Jones gained 197.37 points or 1.10 per cent to close at 18,146.74 points. The Rupee lost 4 paisa or 0.06 per cent to close at Rs 67.36.
In the primary market, the issue from L&T Infotech which is offering for sale 1.75 crore shares in a price band of Rs 705-710 opens for subscription today and closes on Wednesday, July 13. There is a discount of Rs 10 per share for retail investors. The price earnings multiple on a consolidated and fully diluted basis, on which shares are being offered is 12.6. The multiple looks decent, offering scope for appreciation. There is a caveat to this, that there was a large other income component on account of forex in the year ended March 2016 at R 279.56 crore, compared to R 66.78 crore in the previous year. Operating margins are hovering in the 21.6 per cent to 22 per cent range. The issue would receive decent response but not overwhelming, as in the recently listed MGL and to list Quess Corp, but still make it attractive for retail, where chances of allotment would be better.
Gold fold
Markets are looking tired but are refusing to correct, because the possibility of GST being passed looms large. The monsoon session of Parliament begins on July 18 and is likely to be amongst the earlier set of legislation to be taken up. With the event so close, the market would like to be up, even at the prospect of being stretched. It is up to an individual to decide the stance to be taken in the market. It makes sense to take some money off the table, and look for opportunities when they arise.
Brexit is more confusing than when UK decided on the referendum. The modalities of quitting the EU are not as simple and would entail a number of procedures. More importantly, one needs time and sacrifice on the part of EU and UK. No one seems to have started the process as yet and time is counting. An increasing number of terrorist attacks is not helping anyone, in particular, confidence in the markets. This is causing damage to markets worldwide, and the rise in fear is causing gold prices to rise.
New paradigm
There are no clear drivers for the market, as of today. The expectancy of business being transacted in the monsoon session would be the underlying expectation but once the GST bill is passed, there would be new concerns on modalities and beneficiaries of the same. While the debate is on, who would benefit and who lose, two things are clear. Software companies would benefit as new or modified software would be needed to incorporate changes of GST. Secondly, there would be need of professionals like lawyers and others for the implementation and guidance required for the companies to go about the same. It would therefore be advisable to reduce positions, and, be on the sidelines waiting for opportunities.
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.
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