Fantastic Friday at Dalal Street

The markets are seeing huge highs being reached on the back of great trading sessions in the week gone by

The markets did nothing for the first four trading sessions and then had a super Friday which saw the market zooming to yet another high. The reason for the rally on Friday is a mystery even though the weekend is over and no data or reason can be attributed. It is one of those “FFFF” (Friday Feel Fine Factor).

A Bull Run could be on the cards with the markets currently on song. Pic/Bipin Kokate
A Bull Run could be on the cards with the markets currently on song. Pic/Bipin Kokate

Gaining indices
BSESENSEX gained 287.97 points or 1.03 per cent to close at 28,334.63 points while Nifty gained 87.45 points or 1.04 per cent to close at 8,477.35 points. The broader indices saw BSE100, BSE200 and BSE500 gaining 0.91 per cent, 0.97 per cent and 0.91 per cent respectively. BSEMIDCAP rose 0.40 per cent while BSESMALLCAP gained 0.97 per cent.

The top sectoral gainer was BSEBANKEX which gained 2.81 per cent followed by BSECAPGOOD 2.77 per cent and BSEAUTO 1.42 per cent. The top loser was BSEMETAL down 2.41 per cent and followed by BSECONDUR down 1.75 per cent.

In individual stocks, the top index gainer was SBI which saw its share face value split from Rs 10 to Rs 1 and the stock gained 9.42 per cent. Gainers included REC up 11.58 per cent. The losers were led by Jindal Steel down 9.84 per cent and pharma companies Ranbaxy 5.71 per cent, Sun Pharma 5.07 per cent.

Kotak Bank announced that it has acquired ING Vysya and the two would be merged in an all share deal. The swap ratio is 0.725 shares of Kotak Bank for every share of ING. Both shares gained with Kotak Bank gaining 10.19 per cent to close at Rs 1,200, ING gaining 6.10 per cent to close at Rs 817.

SEBI interrogation
The volumes on the counters prior to the announcement give one an impression that some insider trading has happened and SEBI is looking into the matter. Chief Minister of Gujarat Anandiben Patel was in Mumbai for a roadshow on ‘Vibrant Gujarat’ to be held in Gandhinagar in January.

This time the event is being combined with another mega event, the NRI Indian, which will be held as back-to-back events. The event is likely to be the biggest so far in its journey, which began in 2003.

The week ahead has plenty of action as Parliament begins its winter session on Monday, November 24. November series future expires on Thursday, November 27 and at the current level of Nifty the bulls have an upper hand with the October series having expired at a level of 8,169.20 which is lower than the current by 3.77per cent.

With a mere four days to go and 308 points ahead, it should be smooth sailing for the bulls but one can never say. FIIs seem to have slowed down their purchases and were buyers of equity of R 710 crores for the week while domestic institutions were buyers of Rs 430 crores.

Dow Jones continued making new highs and closed at 17,810.06 points a weekly gain of 175.32 points or 0.99 per cent. The Indian rupee was virtually unchanged, closing at Rs 61.76.

Uncharted territory
Markets are precariously poised and as we sail uncharted territory, the risk rises. There is no doubt that the future looks bright. The rate cut clamour is getting shriller and market seems to be pinning its hope that it would happen on December 2.

The possibility of it not happening is also great because the RBI governor may talk about the rate cut this time and say that a 25 basis points cut is neither here or there and he would prefer to wait and give a bigger rate cut in February just before the budget. There are crucial days for the markets in the week ahead with plenty of action and news flow from Parliament, and the futures expiry. Trade cautiously.

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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