Next three days are likely to be extremely turbulent; it is particularly perilous to trade right now
Markets last week gained on expected lines, except that they rallied on Tuesday instead of Monday. The delay in rise was because of huge last hour selling on Monday which rattled markets. The selling could be because of retaliatory action taken by China in the ongoing US China trade wars which saw Dow getting hammered on Monday night. The week ended with markets rising on three trading days and losses on the remaining two days. BSESENSEX gained 467.78 points or 1.25 per cent to close at 37,930.77 points while NIFTY rose 128.25 points or 1.14 per cent to close at 11,407.15 points. The low of the week was 36,956.10 points while it was 11,108.30 on the NIFTY.
This effectively means that the BSESENSEX rose almost 1,000 points from the low while NIFTY rose 300 points. The broader indices saw BSE100, BSE200 and BSE500 gain 0.90 per cent, 0.66 per cent and 0.46 per cent respectively. BSEMIDCAP was down 0.57 per cent while BSESMALLCAP was down 1.55 per cent.
The top sectoral gainer was BSECONSUMER DURABLE up 1.91 per cent followed by BSEFMCG 1.73 per cent and BSE BANKEX 1.52 per cent. The top loser was BSEKEATH CARE down 4.32 per cent followed by BSE METAL 2.26 per cent and BSE POWER 1.52 per cent. In individual stocks the top gainer was Kotak Bank up 4.73 per cent followed by Hero Motocorp 4.58 per cent and State Bank of India 3.54 per cent. The top loser was Yes Bank down 17.96 per cent followed by Aurobindo Pharma 10.55 per cent and Lupin 10.04 per cent. Dow Jones was down 178.37 points or 0.69 per cent to close at 25.764 points. The Indian rupee too was under pressure and lost 31 paisa or 0.44 per cent to close at Rs 70.22 to the US dollar.
Healthcare sector or the pharma sector was under severe pressure with many pharma companies declining around 10 per cent after news of a suit being filed by 44 US States against 20 companies which named seven Indian companies as well. These companies are Wockhardt, Glenmark, Dr Reddy's, Aurobindo, Lupin, Zydus and Taro which is a subsidiary of Sun Pharma. This probably explains why two of the top three losers were from this space and a third company Sun Pharm also lost 6.85 per cent.
Tata Global Beverages and Tata Chemicals have agreed to demerge the consumer division of Tata Chemicals and merge the same with Tata Global Beverages. This should be positive for both companies. Shares of Tata Global Beverages were up sharply gaining Rs 36.85 or 18.57 per cent to close at Rs 235.30, while Tata Chemicals gained R 28.80 or 4.88 per cent at Rs 619.10.
For the next three days, markets would be volatile. Market movement on Friday indicates that Dalal Street believes the National Democratic Alliance (NDA) will form the government. For the next three days though the markets would be volatile. The wisest strategy would be to stay away from markets for the next three days and wait for results to be announced. Unless you have a very compelling reason to buy or sell shares, abstain from doing so. In case you cannot, you should certainly avoid trading, for that could be very dangerous.
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.
Also read: Be calm and play the waiting game
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