The monsoon session is dictating play at the moment on Dalal Street
Last week was a fairly quiet one after the super volatility witnessed in the preceding weeks. Sensex gained 121.83 points or 0.43 per cent to close at 28,236.39 points whilst Nifty gained 31.75 points or 0.37 per cent to close at 8,564.60 points.
Congress President Sonia Gandhi, Vice President Rahul Gandhi (front row centre) and other MPs shout slogans during a protest against suspension of 25 party members, at Parliament in New Delhi. Pic/PTI
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Broader markets gained more with BSE100, BSE200 and BSE500 gaining 0.80 per cent, 1.01 per cent and 1.12 per cent. The entire action was witnessed in smallcap midcap space which saw BSEMIDCAP gaining 2.52 per cent and BSESMALLCAP gaining 2.31 per cent.
Index gains
The top gaining index was BSEAUTO up 3.44 per cent followed by BSECONDUR 2.95 per cent and BSEHEACARE 2.78 per cent. The losers saw just one index in BSEPOWER down a tad at 0.02 per cent. In individual stocks, PSU banks continued to rally and the top gainer was Union Bank up 16.64 per cent followed by Canara Bank11.80 per cent.
Other gainers included DLF up 9.49 per cent and SAIL 8.41 per cent. The losers were led by HCL Tech down 5.82 per cent, Coal India 5.41 per cent and BHEL 4.63 per cent. The Indian rupee appreciated 32 paisa or 0.50 per cent to close at R63.81. On expected lines, RBI in its policy review kept rates unchanged.
The positive takeaway from the post policy conference was the softening of stand going forward which hinted at future rate cuts if inflation remains under check. Dow Jones was under pressure and lost 316.48 points or 1.79 per cent to close at 17,373.38 points. FIIs were buyers of equity worth R1,685 crores during the week.
They also bought Rs 2,600 crores in July as a whole. Domestic institutions were sellers of equity of Rs 405 crores during the week but buyers of Rs 5,450 crores during July. EPFO began purchases of ETF’s (Exchange Traded Funds) from Thursday from the market. This is a good thing from the market perspective and in an ETF there is diversity as well as safety with the fund performing even if one individual company does not do well.
Parliament logjam
Parliament continued its logjam and virtually no work has been done in the current monsoon session. I believe it’s time we the people who pay for our politicians demand a system of ‘no work no pay’. Why not they also be paid only if they allow Parliament to function. It’s a thought and if the thinking becomes widespread would reach the ears of people who matter.
The nation will celebrate its Independence Day on Saturday, August 15. The current times are bad with parliament paralysed. Time has come for the executive to use the wide powers available under the constitution to take this country forward. Green shoots are visible and we need to capitalise on the fact that the economy is showing signs of revival.
In China, things are virtually going downhill. Many factories are working a mere two to three days a week and workers are being paid wages for staying at home the remaining days. With the economy under threat and stock market under pressure, nothing seems to be going right for China.
Markets going nowhere
Our markets have been in range bound trade all through the monsoon session of parliament. Historically, it has been noticed that during the session, our markets normally go nowhere and it is only where there is an event like a bill or voting on a motion that there is movement.
This week will be the last before the session ends, and could see some business happening in parliament. If that does happen, there would be some movement in stockmarket, otherwise we would be as we are. Any meaningful movement is only likely in the week beginning August 17.
Markets are likely to be devoid of any meaningful action. However what frenzied movement is visible in midcap and smallcap space is indicating that one must become cautious and simply not get carried away with price movement. Manipulation of this sector is easy and it is always the retail investor who gets caught. Be cautious.
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 https://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.
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