Snap in trend

Apr 20, 2015, 07:30 IST | Arun Kejriwal

The Budget session of Parliament, which resumes post-recess, will affect both Nifty and Sensex with more negatives than positives

The markets had a torrid time last week and after gains on Monday followed by a trading holiday on Tuesday, lost on the remaining three days of the week. Sensex lost 437.28 points or 1.51 per cent to close at 28,442.10 points. Nifty lost much more at 174.35 points or 1.99 per cent to close at 8,606 points.

Finance Minister Arun Jaitley who was in the US last week will be back in New Delhi this week for the resumed Budget session. Pic/PTI
Finance Minister Arun Jaitley who was in the US last week will be back in New Delhi this week for the resumed Budget session. Pic/PTI

With this weekly loss, the two week gains trend has been snapped. The broader market saw the BSE100, BSE200 and BSE500 lose 2.02 per cent, 2.02 per cent and 2.03 per cent. The BSEMIDCAP lost 2.90 per cent and BSESMALLCAP lost 1.89 per cent.

It may also be mentioned that Parliament begins its second half of the Budget session after a recess and it would be of importance to see how the remaining bills are passed or stalled.

Sectoral gains and losses
The sectoral gainers were led by BSEOIL&GAS up 1.35 per cent followed by BSEMETAL 0.44 per cent and BSEFMCG 0.30 per cent. The losers were led by BSEREALTY down 4.66 per cent, BSEHEALTHCARE down 4.60 per cent and BSEIT 4.08 per cent. In individual stocks, the gainers were led by ONGC up 6.51 per cent followed by Sesa Sterlite 4.41 per cent, Cairn India 3.27 per cent and Reliance 2.54 per cent.

In other stocks, Gujarat Gas was up a staggering 19.44 per cent after it informed the exchanges that it had signed an agreement to set up a city gas distribution business in Thane (Maharashtra). The losers were led by the pharma pack with Lupin down 9.97 per cent and Sun Pharma 7.25 per cent.

Others included Hero Moto 9.26 per cent, DLF 7.16 per cent and Axis Bank 5.98 per cent. Results were announced by two of the heavyweights of the market and both were different. Reliance industries announced better than expected results with refining margins improving while TCS announced a cautious set of numbers where it appears that the sector is finding the going tough.

It however, announced a liberal dividend of R 24 per share and a special bonus for its employees on completing a decade of being listed. The improvement in refining margins indicates that the performance of the three PSU OMCs would significantly improve when they announce their numbers later in the season.

Big results
There are big results later this week, which include Infosys and HDFC Bank. The recent IPO from VRL Logistics Limited received excellent response and was subscribed 74.26 times overall with the HNI category subscribed 250 times and retail 7.92 times.

If one were to consider the allotment in the retail category it would be 2 out of 9 as based on the total forms received of 5.56 lakhs the issue in the retail portion is subscribed 4.46 times. There is another IPO opening this week, on Tuesday, April 21 from MEP Infrastructure Developers Limited.

This is the company that maintains and collects toll on the five entry points to Mumbai and the Sea Link. The issue is in the price band of Rs 63-65 and the company would turn the corner for the year ended March 2015 and would have revenues of just under Rs 2,000 crores based on the seven months revenue for the period ended October 2014 on an annualised basis.

The company looks interesting from an investor's perspective with a medium term view and would offer decent returns. The primary market seems set to see a minimum of one issue a week for the next 6-8 weeks if not more. One hopes and prays that promoters do not turn greedy and kill the goose that lays the golden egg — in this case the investor.

Dow down
The Dow Jones lost 231.55 points or 1.29 per cent for the week to close at 17,826.30 points. The Indian rupee weakened by 5 paisa or 0.08 per cent to close at R 62.36 to the dollar. The week ahead is likely to be under pressure with results for the quarter unlikely to bring cheer to the investors.

While policy and action so far from the government has been good and well-meaning it is yet to trickle into results from Corporate India. With Parliament also convening it would be a tough week for markets and in all fairness some more correction looks likely. Trade cautiously and please do not look at high levels from where stocks have fallen to make buying decisions.

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

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.

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