Go with the flow
The markets fell for all the four trading sessions of the week post Diwali Muhurat on Sunday. The BSE Sensex lost 530.66 points or 2.50 per cent at 20,666.15 points. The Nifty lost 166.45 points or 2.64 per cent to close at 6,140.75 points. The broader indices like the BSE100, BSE200 and BSE500 lost 2.50 per cent, 2.20 per cent and 1.99 per cent respectively. The BSEMIDCAP gained 0.54 per cent while others lost and BSESMALLCAP gained even more at 1.24 per cent. Very clearly there seems to be value buying happening and the general apathy towards midcap and smallcap seems to be reducing if not going away. It maybe early days but there is certainly better participation in the broader market. The top gainer amongst sectoral indices was BSEIT up 1.48 per cent. The other gainers included up BSEHEALTHCARE up 0.36 per cent and BSE POWER up 0.31 per cent. The losers were led by BSECON DURABLES down 6.94 per cent, BSEBANKEX down 6.16 per cent and BSEFMCG down 3.15 per cent.
In individual stocks the biggest gainer was Tech Mahindra up 9.74 per cent. Others included HPCL or Hind Petro up 6.5 per cent and NTPC up 4.41 per cent. The losers were led by Bank of Baroda down 10.55 per cent. The other losers included Titan Industries down 10.38 per cent, Axis Bank down 8.36 per cent and ICICI Bank down 7.33 per cent.
FIIs who have been big buyers seem to have slowed down their purchases and bought stock worth Rs 1,361 crore while domestic institutions sold shares worth Rs 2,190 crore. The rupee depreciated and lost 0.73 paise to close at Rs 62.47. The week ahead is full of economic data and this will be the key driver for the markets. Trade data for October is to be released today, where the focus will be on seeing whether the rising exports trend and the fall in gold imports continue. This will be followed by IIP, Consumer Inflation and manufacturing output on, Tuesday, November 12 and the week will end with GDP and wholesale inflation on Friday, November 15.
The data becomes important as this would give indications of what the Reserve Bank of India (RBI) governor would do in the next review meet in mid-December with interest rates. Further each of these data points has the potential of moving the markets either way, by more than one percent. This would also have an impact on the rupee.
Goldman Sachs issued a report on the opposition BJP under their Prime Minister nominee doing well, which unnerved Union Minister Anand Sharma. His comments on the US Investment Bank report brought about another report and validation of the same from CLSA, the French banker. One fails to understand when the Finance Minister has been wooing FIIs in every nook and corner of the world, why should someone else get worried about the views of one firm? If at all, the only thing could be nervousness at the growing popularity. Standard and Poor’s has confirmed India’s rating as “negative” and said that it would review the same after the new government has assumed office and announced its policy agenda.
We had positive news flow last Friday from the US, where job data was better than expected. The Dow rallied strongly last Friday post this news, and closed positive for the week, gaining 146 points or 0.93 per cent to close at 15,761 points. This strong showing would again raise the debate on the timing of the expected tapering. Twitter debuted on NYSE and its shares were issued at $26 a share. After making an intra-day high of 50.09 they closed the week at 41.65, a gain of 15.65 or 60.19 per cent.
Later this week, Thursday is a trading holiday on account of Muharram. Tata Motors announced great results, largely because of the showing of Jaguar Land Rover (JLR), and as these results came post market there could be some follow-up action on the stock. Tech Mahindra was a great performer on two counts, with the first being good results and MSCI including it in the index. Banking shares have been at the receiving end on account of deterioration in the quality of assets of PSU banks. Shares of private banks have also been at the receiving end as doubts emerge about their quality, and the same was visible with the prices of almost all falling.
The week ahead will be driven by data flow and what the FIIs do. There is enough of data to make it a lively week and a trader’s delight. Key levels for the Sensex are 20,375 and 21,155 while they are 6,025 and 6,260 for the Nifty. The support for the Sensex is at 20,571 points, then at 20,404 points, then at 20,215 points, then at 20,055 points and finally at 19,855 points. It has resistance at 20,791 points, then at 20,905 points, then at 21,011 points, then at 21,124 points and finally at 21,285 points. The Nifty has support at 6,112 points, then at 6,045 points, then at 5,975 points, then at 5,886 points and finally at 5,798 points. It has resistance at 6,176 points, then at 6,241 points, then at 6,282 points, and finally at 6,335 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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