Monsoon manoeuvres

The upcoming season and the rainfall predictions are causing slips and slides at Dalal Street

The markets had some selling pressure and one hopes that with the end of last month coinciding with April futures expiry, this month and series would be better. The Sensex in a four day week shortened by Maharashtra Day holiday on Friday ended the last week at 27,011.31 points, a weekly loss of 426.63 points or 1.55 per cent.

Nifty lost 123.75 points or 1.49 per cent to close at 8,181.50 points, below the 8200 level which was considered a strong support or important point. The broader indices saw the BSE100, BSE200 and BSE500 lose 1.36 per cent, 1.10 per cent and 1.07 per cent whilst BSEMIDCAP and BSESMALLCAP lost substantially less at 0.19 per cent and 0.59 per cent respectively.

LOOKING UP: The rains are set to be a key driver in the market performance. PIC/SAYYED SAMEER ABEDI
Looking up: The rains are set to be a key driver in the market performance. Pic/Sayyed Sameer Abedi

Sectoral performance
The top sectoral gainer was BSEBANKEX up 1.73 per cent followed by BSEAUTO 0.40 per cent. On the losing side, they were led by BSEFMCG down 5.19 per cent, BSEMETAL 1.98 per cent, BSEOIL&GAS 1.94 per cent and BSEHEALTHCARE 1.80 per cent. In individual stocks, ICICI Bank rose 7.51 per cent whilst Axis Bank was up 7.64 per cent. Car maker Maruti gained 5.42 per cent whilst Tech Mahindra was up 6.78 per cent. ITC was the biggest loser following news of a weak monsoon down 7.17 per cent followed by HDFC 6.10 per cent, SAIL 5.95 per cent and Hind Unilever 4.49 per cent.
April futures expired on Thursday, April 30 at 8,181.50 points a loss of 160.65 points or 1.93 per cent. This is the second consecutive monthly loss, though the loss in April is significantly lower than March’s 3.93 per cent. The difference however, is the sharp volatility where the markets gained significantly in the first fortnight and then more than gave up all plus more in the second fortnight.
The primary market saw a successful listing of VRL Logistics where the shares which were issued at Rs 205 closed with gains of 43 per cent to close at R 293.30 on the BSE and at R 294.10 on the NSE. The issue was subscribed very aggressively by all categories particularly the leveraged HNI whose portion was subscribed 250 times.

The leveraging play where HNIs borrow and apply has reached epic proportions where 11 applications alone accounted for 50 times the HNI bucket. This type of over euphoric demand creates a wrong impression in the minds of subscribers and creates effectively misleading demand. One hopes SEBI, the regulator looks into it and stops allowing the HNI individual to bid for more than his own bucket. Subscription for UFO Moviez was completed during the last week with the issue being subscribed just about 2 times.

Selling spree
FIIs have continued their selling spree and were net sellers of Rs 6,300 crores while domestic institutions were buyers of Rs 5,250 crores. The Indian rupee gained marginally at Rs 63.42, a gain of 14 paisa or 0.22 per cent. Dow Jones closed at 18,054.06 points, a minor weekly loss of 56.04 points or 0.31 per cent.

The vexatious issue of MAT affecting FIIs or FPIs as they are now clubbed is the spoilt sport for the market. The Bombay High Court is hearing the issue on May 6 and the Supreme Court has also taken note of the issue and got the two parties to have early hearings and some logical end to this issue should be round the corner.

The issue of tax and the poor results from companies has put pressure on the markets which have been bearing the brunt. The markets have turned negative for the calendar year 2015 and are now down about 488 points on Sensex and 101 points on Nifty.

This week would be driven by political news and also keenly wait any updates on the impending monsoon which though a couple of fortnights away is the key driver for the markets.

With Parliament in session passage of bills in the upper house would be of interest and it would be seen as a positive sign if the same can be manoeuvred through the maze of opposition which currently exists. Things have not changed as market values have and it would be a good time to do stock picking with a medium term perspective. 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

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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