In a festive mood
Investors should ride the rally and the momentum but keep themselves agile as corrections from highs are always swift and deep
The week gone by had plenty of action and was led by what the Reserve Bank of India (RBI) governor did in India and the Federal Reserve (Fed) chairman did in the US. Unexpectedly unchanged rates for India on Wednesday saw the markets gain, and changed the tone and mood of the markets.
The BSE Sensex gained 364.14 points or 1.76 per cent at 21,079.72 points. The Nifty gained 105.85 points or 1.72 per cent to close at 6,274.25 points. The broader indices like the BSE100, BSE200 and BSE500 gained much more at 2.07 per cent, 2.18 per cent and 2.26 per cent respectively.
The BSEMIDCAP gained a significant 3.17 per cent while BSESMALLCAP gained 2.62 per cent. The top sectoral gainer was once again BSEIT up 5.79 per cent. Other gainers included BSEHEALTHCARE up 5.25 per cent, BSEREALTY up 4.96 per cent and BSETECK up 4.86 per cent. There was just one loser in BEBANKEX down 0.61 per cent.
In individual stocks the biggest gainer was Ranbaxy up 7.14 per cent followed by Maruti Suzuki, up 6.97 per cent. Other gainers included Power Finance up 9.68 per cent. Stocks such as Wockhardt were up 18.35 per cent while MCX was up 15.23 per cent and its promoter entity Financial Technologies was up 13.11 per cent. There were very few losers and they were led by HDFC Bank down 3.62 per cent and Jindal Steel down 3.54 per cent.
The RBI governor had his way when he gave the government a chance to bring down food inflation and thus kept interest rates unchanged. He however categorically stated that he will not hesitate to raise rates even outside the policy dates if it does not happen. The US Fed also obliged world markets by announcing the beginning of the tapering with a cut of $10 billion of the $85 billion from the coming month. World markets welcomed this step and the Dow Jones index gained 466 points or 2.95 per cent to close at 16,221 points.
Gold prices are falling and post this announcement fell further. It is believed that the Indian government could cut import duties on gold as the import has fallen substantially and now given rise to smuggling. Just recently it was found that there were 80 passengers on a flight from Dubai to India who were carrying the permissible 1kg of gold as NRIs. FIIs were big buyers during the week and bought equities worth Rs 6,177 crore while domestic institutions in a surprise were also small buyers of R 218 crore. The Indian rupee appreciated R 0.09 or 0.14 per cent to close at Rs 62.04.
Reliance has been allowed to increase gas prices from April 2014 with a condition that they will submit a bank guarantee for the increased prices. Reliance shares rose sharply on Friday and were up R 39 or 4.56 per cent at R 894. Power Grid FPO shares listed on Thursday and investors have made money in an IPO/FPO after a long time. The shares were issued at R 90 with a discount of R 4.50 for retail and employees. Investors were able to sell these shares in a range of R 98-100 and the share closed at Rs 99.35.
All is not well at Infosys since the return of Narayan Murthy for his second innings, with the eighth top management member resigning from the company in less than six months. Nobody would put his finger on the matter or comment but Infosys, being all about people, seems to have gone wrong somewhere. Details or stories would emerge later on but currently all is certainly not well.
Wednesday is a holiday for Christmas and Thursday is the expiry for December futures. The current value of Nifty is higher than the previous month’s expiry by about 2.98 per cent. This gives bulls an advantage and with virtually no pressure they should be able to scale a new high in the festivities of Christmas and New Year. The all-time highs are just about 2 per cent away from current levels making it one good days work.
The Sensex lifetime high is 21,483 while Nifty is 6,415. The festive and positive mood is all set to see a new high if not a retest at the bare minimum. Investors should ride the rally and the momentum but keep themselves agile as corrections from highs are always swift and deep. Key levels for the Sensex are 20,755 and 21,325 while they are 6,155 and 6,375 for the Nifty.
The support for the Sensex is at 20,844 points, then at 20,726 points, then at 20,568 points and finally at 20,472 points. It has resistance at 21,216 points, then at 21,325 points, then at 21,483 points and finally at 21,588 points. The Nifty has support at 6,201 points, then at 6,162 points, then at 6,129 points and finally at 6,025 points. It has resistance at 6,315 points, then at 6,362 points, then at 6,415 points, and finally at 6,488 points. Central bank governors should drive the markets this week.
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.