Christmas hopes at Dalal Street

With the season of joy here, traders will be expecting some stability from the volatile Sensex and Nifty

The week gone by was super volatile. Down for the first three days in which the Sensex lost 31, 538 and 71 points and then gained 416 and 245 points to make a net total of positive 21 points. Intra week on a closing basis lost 640 points and gained 661 points. Similarly, on the Nifty it lost 195 points and gained 196 points.

That’s what traders are hoping for in the Christmas week with gains at the BSE. Pic/PTI
That’s what traders are hoping for in the Christmas week with gains at the BSE. Pic/PTI

Weekly statistics
At the end of the week, statistic will show that it was a flat week while reality was completely different. Sensex gained 20.86 points or 0.08 per cent to close at 27,371.54 points while Nifty gained 1.10 point or 0.01 per cent to close at 8,225.20 points.

BSE100, BSE200 and BSE500 were all in negative territory down 0.10 per cent, 0.17 per cent and 0.29 per cent. BSEMIDCAP lost 1.07 per cent while BSESMALLCAP lost 1.32 per cent. Top sectoral gainer was BSEIT up 2.56 per cent followed by BSETECH 2.00 per cent and BSEOIL&GAS up 1.92 per cent.

Losers were led by BSEREALTY down 5.78 per cent followed by BSEFMCG 5.02 per cent and BSEHEALTHCARE 3.66 per cent. In individual stocks, the top gainer was HCL Tech up 4.96 per cent followed by BHEL up 4.80 per cent and SAIL 4.13 per cent.

Losers were led by ITC down 6.61 per cent followed by Hindunilver 5.39 per cent and Dr Reddy 5.19 per cent. Other losers included Wockhardt down 13.28 per cent and DLF 13.27 per cent. FIIs continued to be sellers and sold shares worth R 4,704 crore for the week, and for December to date their net is R 300 crore of purchases.

This indicates that they are booking profits for the year which is still over 30 per cent up. Domestic institutions were buyers of R 2,840 crore for the week and R 4,489 for the month. Dow Jones gained 524 points or 3.03 per cent to close at 17,804.80 points. Rupee was under pressure and lost R 1 or 1.61 per cent to close at R 63.29.

Wholesale inflation fell to zero for the month of October and is a good sign. Petrol and diesel prices were again cut for the second fortnight of December.

Political factors
Winter session of Parliament ends on Tuesday and the same day election results for the states of Jharkhand and Jammu & Kashmir would be declared. Political news and global cues would be key drivers for the week ahead. December series futures expires on Wednesday this time as Thursday is a holiday for Christmas.

The November series had expired at 8,494.20 points which is 269 points or 3.17 per cent away. For the bulls to recover 269 points in three days is a tough ask and even considering the fact that we have seen such a sharp recovery over the last couple of days is just not enough.

The offer for sale from Monte Carlo Fashions listed on the exchanges on Friday and was a total disaster. The first and only disaster for 2014 in the primary market with the issue priced at R 645 losing over 12 per cent to close at R 566. The issue was exorbitantly priced and received lukewarm response from HNI’s who add the fluff to any issue.

Watch out
To top it off the promoters of the group are not investors friendly with the parent company paying out dividends of no more than 3 per cent of net profits. Roughly, 20 per cent of the shares sold through IPO have been delivered on the first day.

One hopes that merchant bankers and promoters curb their greed and price issues at levels where investors make money. If this does not happen, the primary market revival looks difficult. A tough and volatile week ahead with expiry and end of calendar year looming large.

An over 3 per cent deficit to be covered in three days puts bulls under tremendous pressure. Trade cautiously as GST is to be discussed, implemented and finally introduced and this could be some quarters away. Trade cautiously. Wishing readers a Merry Christmas!

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.

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