Buy during sharp dips, sell in big rallies, is a winning formula in these tough times
Indian students listen to a Unique Identification Authority of India officer, Anil Bhatia (C) as he withdraws money from his bank account with an Aadhaar card during a Digi Dhan Mela, held to promote digital payment in Amritsar. Pic/ AFP
The markets ended with small gains but Friday’s movement signalled weakness and has hoisted a cautionary signal going forward. The BSESENSEX gained 132.77 points or 0.50 per cent to close at 26,759.23 points but not before touching the 27k level in intraday trading on Friday. NIFTY gained 58 points or 0.71 per cent to close at 8,243.80 points and here it touched the 8,300 mark in intraday. The fall from the day’s high was quite significant. The broader markets saw the BSE100, BSE200 and BSE500 gain 1.09 per cent, 1.27 per cent and 1.48 per cent respectively. BSEMIDCAP gained 2.41 per cent while BSESMALLCAP gained 3.27 per cent.
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Finance Minister Arun Jaitley (fourth from left) with Union Minister of Steel, Mines, Labour and Employment Narendra Singh Tomar and others from the BJP on Sunday. Pic/PTI
The top sectoral gainer was BSEREALTY up 7.21 per cent followed by BSECONDUR 5.80 per cent and BSEMETAL 5.24 per cent. The top loser was BSEIT down 2.90 per cent followed by BSETECK 1.88 per cent. In individual stocks, the top gainer was Tata Steel up 7.31 per cent followed by Cairn India 5.62 per cent, Bharti Tele 4.77 per cent and BHEL 4.70 per cent. In other stocks, DLF gained 13.70 per cent. The OMC pack was a big gainer with IOC up 6.40 per cent, Hind Petro 5.87 per cent and Bharat Petro 4.56 per cent. On the losing side were Infosys down 3.88 per cent followed by TCS 3.325 and HDFC 3.17 per cent.
The Information and Technology pack was hit on account of a bill being introduced in US on H1-B visas. This bill seeks to give locals more employment and the average pay packet would go up from $60,000 to $100,000.
More people would have to be appointed locally. impacting margins significantly in the short term at least. IT companies will begin to declare results in the coming week with Tata Consultancy Services (TCS) results due on Thursday, January 12 and Infosys, on Friday, January 13.
The Dow Jones is finding crossing the 20k mark a barrier of sorts. Even last Friday it attempted to cross that and remained there and failed. The Dow Jones gained 201.20 points or 1.02 per cent to close at 19,963.80 points. The Indian rupee lost 4 paisa or 0.06 per cent to close at R 67.96.
That’s the date
Election dates have been announced for the five states going to polls. The first states to go to polls would be Punjab and Goa on February 4. India’s largest state, Uttar Pradesh, will see a five phase poll beginning on February 11 and ending on March 8, 2017. Polling will also be held in Manipur on March 8. The election results which will be declared on Sunday March 11 and will be a mini referendum on Prime Minister (PM) Narendra Modi’s demonetisation drive.
The opposition is against the budget being presented on February 1 and has complained to the Election Commission on the issue. The Govt. has announced the date for the budget session to begin on January 31. The President P Mukherji, is to address the joint session of Parliament on the same day. The railway budget this time onwards would be subsumed by the main budget and be a part of it. The effect of the budget would become law from April 1 and avoid the period of uncertainty which used to exist earlier.
Tired and wired
The markets are looking tired and seem to have lost their momentum. The movement of last week is quite confusing and markets lost on alternate days of the week. The first third and fifth day saw losses while the second and fourth day registered gains. Making money in such a scenario with low volumes is extremely difficult. With quarterly results from next week, the economy which still needs some more time to return to normalcy, no triggers in the medium term and difficult market situation it makes sense to just sit out. Buy when there are sharp dips and sell when then are big rallies is the only way of trading in current times. The first bright spark would be post budget and one needs to have light positions to capitalise on the same.
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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