Thursday would be a good day to trade, as volatility is likely to be very high; keep on the sidelines
During the past week, which had three trading days and one hour of special 'muhurat' trading for the new Hindu calendar year Samvat 2074, markets were marginally negative.
The past week had three trading days and one hour of special muhurat trading. Representation pic/Bipin Kokate
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While they opened the week on a positive note, they were slightly negative for the next two days, before Diwali trading saw markets lose ground and surrender Monday's gains. Two things may be mentioned here: first, even last year's muhurat trading ended in a negative territory and second, global markets were down on Thursday when we had the special session.
In Samvat 2073, the year gone by, markets ended on a positive note and registered strong gains with BSESENSEX up 4,642.84 points or 14.25 per cent and NIFTY gaining 1,572.85 points or 15.40 per cent. The top performing sectoral indices was BSECONDUR, up 30.33 per cent while the only one in the negative territory remained BSEHEALTHCARE, down 15.55 per cent.
Coming to this week, one saw the BSESENSEX lose 42.73 points or 0.13 per cent to close at 32,389.96 points. NIFTY lost 20.90 points or 0.21 per cent to close at 10,141.55 points. The broader indices saw BSE100, BSE200 lose marginally at 0.15 per cent and 0.04 per cent, while BSE500 gained 0.05 per cent. BSEMIDCAP gained 0.68 per cent and BSESMALLCAP was up 0.91 per cent.
Gainers and losers
The top sectoral gainer was BSEOIL&GAS up 1.70 per cent followed by BSEREALTY 1.56 per cent and BSEMETAL 0.83 per cent. The top loser was BSEBANKEX down 3.37 per cent followed by BSECONDUR 0.32 per cent and BSEIT 0.11 per cent. In individual stocks the top gainer was Bharti Airtel up 8.92 per cent followed by India Bulls Housing 5.68 per cent and Reliance 3.63 per cent.
The top loser was Axis Bank down 15.01 per cent by results, which showed that the asset quality is under stress. The other losers included ICICI Bank down 5.68 per cent and State Bank 4.10 per cent.
The Indian Rupee lost 11 paisa or 0.17 per cent to close at R65.04 to the US Dollar. Dow Jones had a great showing and was up to yet another high, gaining 456.91 points or 1.96 per cent to close at 23,328.63 points.
The week ahead would see October futures expire on Thursday, October 26. Currently, the bulls have an upper hand and the series is 377.60 points or 3.72 per cent up. Thursday would, of course, be a super volatile day and throw up opportunities for trade.
The primary market seems to be moving on relentlessly. The pipeline is so strong that one wonders whether it has one objective only, which is to exhaust the liquidity being generated by inflows into mutual funds through SIPs.
Only issue
The week ahead would see shares of IEX Limited and GIC RE (General Insurance Company Limited) listing. The only issue to be opening this week would be the one from Reliance Nippon Life Asset Management Limited, which would be raising between Rs 1511.64 crore to Rs 1542.24 crore through 6.12 crore shares in a price band of Rs 247-252. This would be the first AMC or asset management company to list in India.
During the last week, we had two listings. Shares of Godrej Agrovet listed and recorded gains of over 28 per cent at weekend, while those of MAS Financial Services Limited gained 43 per cent. Besides the above, there is news flow indicating that three issues would have roadshows in the coming week and their issues would follow in the subsequent week. These are New India Insurance, Khadim's (the footwear company from Kolkata) and Mahindra Logistics.
Result season
Result season has begun and there are some key results in the week ahead from different sectors. These include Hindustan Unilever, Infosys, Glaxo Pharmaceuticals, HDFC Bank and ICICI Prudential. None of them are from the sector and their performance would give leading indicators of how the economy has fared.
It would be important to see whether the elusive growth of 15-20 per cent in corporate India happens or once again gives a miss. I strongly believe that if the growth is missing this quarter, valuations would adjust to reflect the growth and not remain at the current levels.
The week ahead has October futures expiry, two listings, one issue opening and three more roadshows, keeping the market on its toes. Thursday would be a good day to trade as volatility is likely to be very high. Keep on the sidelines and allow the market to correct itself.
Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd.
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.
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