If the GST Bill is tabled during this Parliament session, great times at Dalal Street will commence
Markets gained last week on the first four days of trading and lost some ground on Friday. Net gains were significant and markets closed at a new high for the year on the Sensex and Nifty. The Sensex gained 709.60 points or 2.62 per cent to close at 27,836.50 points while Nifty gained 218.20 points or 2.62 per cent to close at 8,541.40 points. The broader markets saw the BSE100, BSE200 and BSE500 gain 2.64 per cent, 2.34 per cent and 2.15 per cent respectively. BSEMIDCAP gained 2.06 per cent but BSESMALLCAP gained a mere tad at 0.02 per cent.
Prime Minister Narendra Modi, Home Minister Rajnath Singh, Finance Minister Arun Jaitley, Parliamentary Affairs Minister Anant Kumar, Congress leaders Mallikarjun Kharge, Ghulam Nabi Azad, Jyotiraditya Scindia at an all-party meeting ahead of the monsoon session, at Parliament House in New Delhi. Pic/PTI
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In sectoral gainers, the top performance was BSEMETAL up 8.31 followed by BSEBANKEX 5.27 per cent and BSEAUTO 3.63 per cent. The losers were led by BSEIT down 3.56 per cent and BSETECH 1.97 per cent. In individual stocks, the top gainers were from either the metal or banking pack.
Tata Steel gained 17.03 per cent followed by Vedanta 14.12 per cent and the group company Cairn India which is to be merged up 18.98 per cent. The banking pack saw PNB gain 15.65 per cent, Canara Bank 13.47 per cent and ICICI Bank 9.79 per cent. The losers were few and one had to actually look for them. The top loser was Infosys down 7.51 per cent followed by Tata Power 2.45 per cent and Sun Pharma 1.16 per cent.
Gains
The Indian rupee gained 30 paisa or 0.45 per cent to close at 67.06. Dow Jones had a great week gaining 369.81 points or 2.04 per cent to close at 18,516.55 points. The geo-political situation is not too good and we seem to be having incidents spread across the world where the target is poor innocent citizens and unfortunately children seem to be bearing the brunt of it. Bangladesh, France, US and now Turkey saw an attempted coup.
Primary markets are in the pink of health currently. Last week saw one issue listing, one issue opening and closing for subscription and yet another company announcing its issue and having the road show. Quess Corp which was subscribed overall 144 times and HNI or leveraged portion subscribed 392 times listed. The share closed with gains of R 174.65 or 55.09 per cent at Rs 491.65 against the issue price of Rs 317.
The issue from L&T Infotech did reasonable well with the overall issue subscribed 11.69 times. QIB portion 19.91, HNI 10.76 and retail portion 7.39 times. The number of applications received was a record beating the recent 9.76 lakh applications at 10.90 lakh applications.
Issues
The issue from Advanced Enzymes opens on Wednesday, July 20 and closes on Friday July 22. The company plans to raise R 412 crores at the top end of the price band of Rs 880-896. The shares are being offered at price earnings multiple of 24.87 based on the fully diluted, consolidated earnings for the year ended March 2016. The earnings for the year are R 36.03. The grey market for the issue indicates a premium in the range of Rs 360-380 which is about 40 per cent of the issue price.
Parliament begins the monsoon session today, July 18. It is a short session and would end before Independence Day on August 12. A large number of bills are expected to be put up for debate during this session including the all-important GST Bill. It is expected that the bill maybe amongst the first of the block and could be tabled in the first week of the monsoon session.
Assuming something like this does happen there is a possibility that the passing of the bill would lead to euphoria in the markets. Euphoria or gloom does not last beyond the 48-72 hour period and something similar would happen this time around as well. On the flip side if it is tabled towards the end of the session, the markets could be in an extended bull phase with the markets inching up in anticipation of GST becoming a law.
International
Global markets seem to be doing better than expected even though Brexit has happened. Though it sounds strange, the fact remains that nobody likes falling markets. In such a scenario one has to choose which way to trade.
The first choice is go with the trend of the market and the second is do what the mind says. In short it means one has to reduce exposure to the market and wait for valuations to become justified or allow sanity to return. I believe in India, once important bills are passed the same logic would apply. Trade cautiously and do not get carried away by euphoria. It is always short lived.
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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