To sustain in turbulent times, it is lights, camera, caution
Markets continued their super volatile movement, with two days of gains and three days of losses. The net result was a virtually flat week. The BSESENSEX ended the week with a miniscule loss of 19.38 points or 0.08 per cent to close at 24,435.66 points. The NIFTY lost 15.35 points or 0.21 per cent to close at 7,422.45 points. The broader indices saw the BSE100, BSE200 and BSE500 lose 0.52 per cent, 0.57 per cent and 0.73 per cent respectively. BSEMIDCAP lost 1.46 per cent and BSESMALLCAP 1.71 per cent.
Finance Minister Arun Jaitley shakes hands with Christine Lagarde, Managing Director, IMF during a session at the World Economic Forum in Davos, Switzerland last week. On January 19, the IMF downgraded its forecast for global economic growth. Pic/PTI
In sectoral gainers, the top performer was BSEBANKEX up 2.25 per cent followed by BSECAPGGODS 1.15 per cent and BSECONDURA 1.10 per cent. The losers were led by BSEOIL&GAS down 3.45 per cent, followed by BSEREALTY 2.74 per cent, BSEFMCG 2.72 per cent and BSEPSU 2.05 per cent.
Ups and downs
In individual stocks, the top gainer was Axis Bank up 13.5 per cent, followed by GAIL 9.31 per cent, BHEL 7.91 per cent and Tata Steel 7.48 per cent. The losers were led by Vedanta down 11.18 per cent. Others included all the oil marketing companies with HPCL down 9.83 per cent, BPCL 5.46 per cent and IOC 4.70 per cent. Reliance Industries was down 6.43 per cent, while Cairn India was down 5.46 per cent. Other big losers included NMDC 6.57 per cent and Coal India 5.74 per cent.
Interglobe Aviation, the company, which owns Indigo Airlines had a disastrous Friday, despite posting the best set of quarterly numbers for any aviation company in India. Analysts who joined the call on Thursday, were unhappy about the answers that the company gave to queries that they had. The concern was on the delay in delivery of A320 neo engine aircraft and also the increase in expenses when fuel costs have dropped significantly. The share closed at R 968.75, a loss of R 208.75 or 17.72 per cent.
Global markets have all rallied strongly on Friday, but were more or less flat for the week. Dow Jones gained 1.33 per cent on Friday and 105.43 points or 0.66 per cent for the week to close at 16,093.51 points. The Indian Rupee, after a volatile week ended virtually flat, losing 2 paisa or 0.03 per cent at R 67.62.
The week ahead has a trading holiday on Tuesday on account of Republic Day. The January futures expires on Thursday, January 28. The current level of NIFTY is a good 523 points or 6.59 per cent lower than the December expiry, giving bears a complete domination on the month so far. Friday’s rally was driven by global cues and also short covering. With the midweek holiday, there is every possibility that people may square up their positions today afternoon or begin taking new positions only on Wednesday. In either case, volatility is likely to remain high and may cause wild swings in both directions.
This week will see an IPO from Precision Camshafts Limited, which is a combined issue with a fresh issue of R 240 crore and an offer for sale of 91.50 lakh shares. The price band of the issue, which opens on Wednesday, January 27 and closes on Friday, January 29, is R 180-186. The total issue would raise R 410 crore at the top end of the band.
The week ahead would be volatile, and though the markets have recovered on Friday and closed virtually flat for the week, I believe we are not yet out of the woods. The recovery process will take longer and the bottoms would be re-tested at least a couple of times, if not more. The volatility would continue and with a holiday and expiry on the cards, it could increase further.
Global cues and corporate results would be drivers for the market, and at present, neither instills confidence. Play the markets with caution and being conservative would hold one in good stead.