Short and sweet rallies

There may be volatile trading in the week as Dalal Street is yet to get to terms after the sharp fall

The week gone by saw the markets lose ground on four of the five days and remain flat on the fifth day. The expiry of March series on Thursday was a bloodbath with indices losing sharp ground.

Arun Jaitley
MONEY TALKS: Arun Jaitley (c) flanked by CMD MS Rana Security and Printing and Minting Corporation of India LTD (SPMCIL) and Ajay Tyagi, Additional Secretary during the SPMCIL’s 9th Foundation Day celebrations. PIC/PTI

Sensex lost 802.44 points or 2.84 per cent to end at 27,458.64 points while Nifty lost 229.50 points or 2.68 per cent to close at 8,341.40 points. Broader markets saw BSE100, BSE200 and BSE500 lose 2.70 per cent, 2.60 per cent and 2.66 per cent respectively. BSEMIDCAP lost 2.50 per cent while BSESMALLCAP lost 3.86 per cent. There was no sectoral gainer and the one to fall the least was BSECONDUR down 0.55 per cent. Losers were led by BSEOIL&GAS down 5.24 per cent, BSEIT and BSEPSU down an identical 3.30 per cent and BSEBANKEX 3.20 per cent.

In individual stocks, the top gainer was BPCL up 3.16 per cent followed by Lupin 2.57 per cent and Hindalco 1.10 per cent. Losers were led by Bank of Baroda down 6.56 per cent, LIC Housing 6.57 per cent, Wipro 6.13 per cent, HDFC 5.68 per cent and Reliance Industries down 4.92 per cent.

This was a new 52 week low for Reliance which intraday touched R 802 before closing at Rs 812. It may be mentioned that Nifty has in 12 months gained 25 per cent.

March series futures
The March series futures expired on Thursday and spooked the markets. Sensex lost 654 points while Nifty lost 208 points. The fall also led to the March series ending at 8,342.15 points, a monthly loss of 344.70 points or 3.97 per cent.

The fall was attributed to position unwinding, yearend considerations and also the attack on Yemen by Saudi Arabia. Global markets have also corrected during the week and Dow Jones closed at 17,712.66 points, down 414.99 points or 2.29 per cent. FII’s were buyers of just about Rs 287 crores of equity while domestic institutions were buyers of R 315 crores. The Indian rupee at R 62.41 gained 5 paisa or 0.08 per cent.

In the primary market, news shares of Adlabs Entertainment Limited the owners of the theme park at Khopoli would be listing this week and allotment of shares of Inox Wind would be done. Investors have a lot of expectations from these shares.

A spate of right issues are currently happening and Tata Motors was the latest to do so. The record date for the issue is April 8 and they would be offering rights to shareholders of ordinary shares and DVR shares at differential prices.

After passing two bills and finding that the Land bill would not go through, the government has decided to prorogue Rajya Sabha and re-promulgate the ordinance with amendments.

The government will now have the opportunity to debate the same in the current Budget session of Parliament after the break and also keep their options on a joint session open. The intent of the government is quite clear that they mean business and impediments would be removed and ease of business done.

Financial year ends
The financial year ends on March 31 but trading has ended as we follow a T+2 or trade day plus two days settlement. The banks are closed for annual closing on Wednesday and then there are two consecutive trading holidays on Thursday and Friday.
This means that trades done on Monday would be settled on the following Monday, April 6. The week is likely to see volatile trading as the market is yet to get to terms after the current sharp fall.

The next two days could also see some freakish movement in midcap and smallcap stocks on account of NAV (net asset value), an exercise done by funds to determine the value of their holdings at the end of the financial year. Results for the quarter ended March 2015 would begin shortly and it is widely believed that they are likely to be a tad lower. The market has already discounted the same and corrected in value.

Use the current weakness to enter the market and this time around, look for quick returns because there will be plenty of short but sweet rallies.

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

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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