The markets continued to rally in the week gone by and were at their best in the last half hour on Thursday when the April futures expired. The fact that the sharp rally in half an hour looked unsustainable was borne out when markets fell on the last day of the week on Friday.
The markets ended positive with the BSE SENSEX gaining 270.26 points or 1.42 per cent to close at 19,286.72 points. The NSE NIFTY gained 88.35 points or 1.53 per cent to close at 5,871.45 points. The broader indices gained similar with the BSE100, BSE200 and BSE500 gaining 1.38 per cent, 1.38 per cent and 1.31 per cent respectively. The BSEMIDCAP and SMALLCAP gained much less at 0.92 per cent and 0.81 per cent respectively.
The BSE AUTO was the top gainer up 4.11 per cent. Other gainers included BSE CAP up 3.16 per cent, BSE CON up 2.48 per cent and BSE HEALTH up 2.10 per cent. BSE IT continued to be a loser down 4.83 per cent while BSE REALTY was marginally down at 0.19 per cent. In individual stocks, Jet Airways was the top gainer up 19.70 per cent after the deal with Etihad Airways where they would acquire a 24 per cent stake for Rs 2,060 crore.
Maruti Suzuki gained 9.63 per cent after posting excellent results for the year, which saw its net profit rise to Rs 2,469.29 crore against Rs 1,681.09 crore in the previous year. Other gainers included Coal India up 6.63 per cent, Hero Moto up 6.25 per cent and Bharti Airtel up 6.22 per cent. The losers were led by the IT companies, where Wipro lost 10.46 per cent and TCS lost 5.69 per cent. The other notable loser was ONGC down 3.05.
This week has a trading holiday midweek on Wednesday on account of Labour Day and also Maharashtra day. Friday May 3, sees RBI announcing its mid quarter review where it is widely expected that there would be a 25 basis points cut in repo rates. If nothing more than this happens, the markets would correct as the expectation last Thursday, looking at the rally in the market, talks of a 50 basis points had begun to do the rounds.
Gold and silver prices have rebounded of their lows and the Indian Rupee has depreciated to Rs 54.38. FIIs were net investors in shares of Rs 3,046 crore, while domestic institutions were net sellers of Rs 2,106 crore. The April series expired at 5,916.30 points, a gain of 233.75 points or 4.11 per cent. The Indian monsoon is expected to be normal and 98 per cent of the long term average rainfall is expected, which if it does happen would be real good news for agriculture.
There is an IPO from Scotts Garments Limited, which is currently on and closes on Monday, April 29. The company is raising around Rs 137 crore in a price band of Rs 130-132. The company is a manufacturer of readymade garments and is offering its shares at a valuation of roughly 14.5 times its seven months earnings on an annualised basis, discounted for the dilution in equity. The issue considering the fact that the company is a garment manufacturer and not a retailer does not leave anything for the investor in terms of upside.
The political scene is not too conducive for the markets and may turn out to be the joker in the pack. The JPC Chairman on 2G is involved in a fracas with his committee members and the coal scam being investigated is involved in a different issue with the Supreme Court. The court would take up the matter on April 30 and both these issues would keep Parliament from non-functioning in the days to come. No work has been done in the session which began a week ago and is likely to continue to remain the same. Key bills like the food security and land acquisition bills are due for discussion, which are key focus areas of the ruling UPA.
The markets would look forward to directions from RBI for direction. Unless the cut is more than 25 basis points, expect the markets to trade with a negative bias. Key levels for the SENSEX are 19,050 and 19,725 while similar levels for the NIFTY are 5,750 and 5,950 respectively. The BSE SENSEX has support at 19,209 points, then at 19,094 points, then at 18,989 points, then at 18,756 points and finally at 18,669 points.
It has resistance at 19,364 points, then at 19,485 points, then at 19,612 points, then at 19,742 points and finally at 19,929 points. The NSE NIFTY has support at 5,852 points, then at 5,805 points, then at 5,754 points, then at 5,705 points and finally at 5,664 points. It has resistance at 5,898 points, then at 5,935 points, then at 5,971 points, then at 6,024 points and finally at 6,068 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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