Fried on Friday

Updated: Feb 11, 2019, 08:20 IST | Arun Kejriwal

Things were on course till one company's loss report impacted the market significantly

Fried on Friday
A border fence is seen near where law enforcement vehicles line up which marks the boundary between Mexico and the US (Eagle Pass, Texas). The border has become a point of contention between Trump and the Democrats. Pic/Getty Images/AFP

The week gone by behaved exactly as envisaged. Then, Friday happened. The impairment provision provided by Tata Motors saw the company report a loss of Rs 27,000 crore and the share fell. Friday saw markets lose over 1.3 per cent.

Markets however managed to close with small gains, with BSESENSEX up 77.05 points or 0.21 per cent at 36.546.48 points. NIFTY gained 49.95 points or 0.46 per cent to close at 10,943.60 points. The broader indices saw the BSE100, BSE200 and BSE500 were a mixed bag with a movement of 0.08 per cent, and negative 0.09 per cent and 0.27 per cent respectively. BSEMIDCAP and BSESMALLCAP were down 2.13 per cent and 2.11 per cent.

Loser user
The top sectoral gainer was BSETECK up 1.66 per cent followed by BSEIT 1.23 per cent and BSECONS DURABLE 1.13 per cent. The top loser was BSEPOWER down 5.63 per cent followed by BSECAP GOOD 3.53 per cent and BSEMETAL 2.62 per cent. In individual stocks the top gainer was ZEE Entertainment up 12.02 per cent followed by Infratel 9.69 per cent and Bajaj Auto 9.43 per cent. The top loser was Tata Motors down 16.75 per cent followed by India bulls Housing 9.32 per cent and Yes Bank 5.84 per cent.

Trump fight
The Indian Rupee lost 6 paisa or 0.08 per cent to close at Rs 71.30. Dow Jones gained 42.44 points or 0.17 per cent to close at 25,106.33 points. Donald Trump is now fighting against several fronts. Firstly the China-US trade wars. Secondly, he is fighting Democrats on the Mexican wall and funds required for it. Thirdly, he himself is under investigation as far as his businesses are concerned.

Surprise package
RBI delivered a surprise package with a rate cut which was unexpected. Repo rates were cut by 25 basis points to 6.25 per cent. This rate cut is after 17 months. RBI also changed its stance to neutral from calibrated tightening, indicating that they are comfortable with the current level of inflation and do not expect the same to rise in the near term. This incidentally was the Governor Shaktikanta Das's first policy meeting. Markets probably did not like the unexpected rate cut. This can be seen as after remaining in positive territory they ended flat for the day.

Listing look
There were two listings last week. The first was Xelpmoc Technology and Design Limited which had raised Rs 23 crore at Rs 66. Shares listed weak and gained thereafter to close at Rs 71.30, a gain of Rs 5.30 or 8.03 per cent. The other issue was from Chalet Hotels Limited which had raised Rs 950 crore through a fresh issue and an offer for sale of 2.4685 crore shares at Rs 280. The share listed on Thursday and closed at Rs 292.15, a gain of Rs 12.15 or 4.34 per cent.

Short going
Markets have seen BSESENSEX gain about 500 points and NIFTY about 80 points. Market players have been able to get some share or the other to short every week and make money. This shorting is on account of news flow and has made players bearish in their view as well. Last week was the turn of ADAG (Anil Ambani) companies and Friday was Tata Motors. With such opportunities every week it is natural for their confidence levels to rise and they see markets looking weak as well. It is this bearish sentiment that is pushing markets and making them extra volatile. Every rally is sharp and so are the falls.

The week ahead would see the last week for the quarter results ending December 2018 being declared. There are bound to be surprises in them, some positive and some negative. Continue trading on both sides with buys on sharp dips and selling on rallies in the coming week. Markets will trade in a broad range like last week, but with a positive bias.

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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