It was an action packed week with all the drama one could ask for. US President Barack Obama won the US elections for a second term with a reasonably comfortable margin. The election results, India’s largest takeover deal by Diageo of United Spirits and corporate results from individual companies made their stocks move in an unpredictable manner. All this also ensured that the markets moved in a volatile manner with the BSESENSEX losing 71.77 points or 0.38 per cent to close at 18,683.68 points. The NSENIFTY lost 11.45 points or 0.20 per cent to close at 5,686.25 points. The broader indices like the BSE500, BSE200 and BSE100 were marginally down losing 0.03 per cent, 0.05 per cent and 0.05 per cent respectively. The BSEMIDCAP and BSESMALLCAP closed on a positive note, gaining 0.23 per cent and 0.07 per cent respectively.
In sectoral indices, the top gainers were BSEREALTY (up 5.11 per cent), BSEFMCG (up 1.79 per cent) and BSEHEALTH (up 0.49 per cent). The losers included BSECAP (2.21 per cent), BSEOIL (2.17 per cent), BSEMETAL (down 1.75 per cent) and BSEPSU (down 0.88 per cent). In individual stocks, the gainers were J&K Bank (up 6.36 per cent), Tata Motors (up 3.93 per cent), HDFC (up 3.52 per cent) and Hind Petro (up 3.41 per cent). The losers included Tata Communications (down 4.55 per cent), ONGC (down 3.24 per cent), L&T (down 3.22 per cent) and Hero MotoCorp (down 1.90 per cent).
Results from companies dominated the week and there were enough of good and bad results to keep the markets going. SBI declared a 30 per cent growth in net profits but simultaneously also reported a hefty rise in slippages of R8,400 crore. It also provided a lower provision coverage ratio as at the end of September quarter. The stock slid R88 or 3.92 per cent post the results. Tata Steel reported a disastrous set of numbers with a consolidated net loss of R364 crore against a net profit of R243 crore a year ago. The share lost R13 or 3.22 per cent on Friday. Tata Motors reported good results and the share was a gainer. ONGC results were poor on the back of a substantial rise in the subsidy amount that the company had to share with Oil Marketing Companies (OMC). The share price of ONGC fell sharply and closed at R257.10, a loss of R8.60 or 3.24 per cent. The government distributed R30,000 as subsidy to the OMCs on the eve of their results and because of that, all three companies reported profits compared to losses in the year ago period.
In global news, the European Central Bank (ECB) and Bank of England (BOE) kept interest rates unchanged. The US elections saw concerns of the ‘Fiscal Cliff’ getting exacerbated with the Republicans winning the majority in Congress. This issue saw the Dow Jones losing ground during the week, down 278 points or 2.12 per cent.
FIIs continued to be buyers during the week with purchases of R1,494 crore while domestic institutions were net sellers of R598 crore. The Indian Rupee continued to depreciate closing at 54.75 for the week against the previous week’s close of 53.81.
The long awaited and inevitable Diageo-United Spirits deal finally happened. Once the open offer is fully subscribed, Diageo would own 53.4 per cent of the company and would have paid R11,166 crore. The stake sale would happen at a price of R1,440 which is at a premium of R80 or
5.88 per cent.
The week ahead sees two trading holidays; with just a three-trading- days-week, markets would be lacklustre. ‘Muhurat’ trading for Samvat 2069 would be held on Tuesday, November 13, between 3.45 pm and 5 pm, followed by a holiday on Wednesday. This would break the momentum and with quite a few people using the break for holidays, volumes and interest in the market would be on a low key. The market is at an interesting juncture but a breakout or breakdown is unlikely to happen at this level simply because of the low level of activity likely next week. The week ahead would take cues from global markets particularly the US. The BSESENSEX has support at 18,595 points, then at 18,475 points, then at 18,357 points and finally at 18,251 points. It has resistance at 18,833 points, then at 18,955 points, then at 19,071 points and finally at 19,202 points. The NSENIFTY has support at 5,658 points, then at 5,614 points, then at 5,584 points and finally at 5,555 points. It has resistance at 5,732 points, then at 5,769 points, then at 5,806 points and finally at 5,849 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
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