Smile season is here as Diwali brightness continues
BJP candidates wave to their supporters during their nomination filing procession ahead of State assembly elections, in Indore. Pic/PTI
Trading last week was a short three days and one hour on account of Diwali festivities. Muhurat trading for Samvat 2075 began on an auspicious note and BSESENSEX gained 245.77 points or 0.70 per cent to close at 35,237.68 points. NIFTY gained 68.40 points or 0.65 per cent to close at 10,598.40 points. These gains helped the benchmark indices close in positive territory for the week with BSESENSEX up 146.90 points or 0.42 per cent at 35,158.55 points. NIFTY was up 32.20 points or 0.31 per cent , to close at 10,585.20 points. The broader indices saw BSE100, BSE200 and BSE500 gain 0.42 per cent, 0.42 per cent and 0.51 per cent respectively. BSEMIDCAP was up 0.37 per cent while the BSESMALLCAP was up 1.43 per cent.
Winners, losers
The top sectoral gainer was BSEREALTY up 2.49 per cent followed by BSEHEALTH CARE 0.89 per cent, BSEAUTO and BSEIT were identical at 0.72 per cent. The top sectoral loser was BSEMETAL down 1.60 per cent followed by BSECONDUR 0.95 per cent and BSEOIL&GAS 0.59 per cent. In individual stocks, the top gainer was Yes Bank 8.81 per cent, followed by Sun Pharma 4.29 per cent and Asian Paints 4.17 per cent. The top loser was Cipla 13.43 per cent, followed by Vedanta 7.49 per cent and Indian Oil 4.29 per cent. The Indian Rupee remained unchanged at R 72.49 to the US Dollar. Dow Jones had a solid showing and gained 718.47 points or 2.84 per cent to close at 25,989.30 points. The US Fed in its meeting last week decided to keep interest rates unchanged in the band of 2.00-2.25 per cent. It is now widely believed that rates would be hiked in the next meeting that takes place in December 2018 by 25 basis points.
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Good news
Commercial Paper used as a borrowing device or mechanism is due for redemption or rollover on November 14, by NBFCs. Post this date, there would be clarity as to which NBFCs are in trouble or comfortably placed. Due to this one can be sure that those not having any issues and classified as the more stable companies are likely to gain post confirmation of this date, that all is well. Expect substantial volatility in the NBFC space next week. Crude oil prices have corrected significantly and are now below 70$ to the barrel. This has brought prices to a more than seven-month low and they are at April 2018 levels. With the pressure on the Indian rupee too subsiding, this is good news for the country.
Positive signs
Results season for the July-September quarter would come to an end next week. There are some positive signs visible in the results and one can take cognizance that the coming quarters will see an uptick going forward. The lows made in the last week of October seem to be a bottom of sorts for the time being. While a re-test of the same can never be ruled out, it would need negative news flow for the same to happen. Currently it appears that Diwali has changed the sentiment and the direction of news flow from negative to positive. For it to reverse once more, we would need dramatic things to happen.
New year
Samvat 2075 began on Wednesday, November 7. Markets in Samvat 2074 were very volatile and choppy. The net gain on the BSESENSEX was 2,601.95 points or 8.03 per cent at 34,991.91 points. NIFTY closed at 10,530 points, a gain of 295.55 points or 2.88 per cent. Other benchmark indices ended in the red with BSEMIDCAP down 1,386.41 points or 8.60 per cent down. BSESMALLCAP lost 2,650.7 points or 15.53 per cent and Bank NIFTY was down 952.40 points or 3.86 per cent. This clearly shows that Samvat 2074 was a tear for traders and not long-term investors. While trading on Muhurat day is mere symbolic, fundamentals of the market seem much better and it is expected that this would be a year for investors.
Trend bend
The week ahead would see markets building on their gains of the previous fortnight and looking for news which could lead to a breakout. The trading range that is currently there needs to be broken in either direction for there to be further gains. Play the market with the trend but use the sharp movement in either direction to your advantage.
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.
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