Year end fireworks
There were some shocks that rocked the markets in the last week; traders are hoping the last few days of 2014 are smoother
The week gone by was volatile. What we saw last Monday, when the markets defied logic and rose sharply remains unexplainable even as of date. They corrected on Wednesday which was expiry day and lost sharply on Friday, which was the first trading day for the January series.
STEERING ON: Narendra Modi has helped India have an eventful 2014 on the business scene. PIC/PTI
Sensex lost 129.76 points or 0.47 per cent to close at 27,241.78 points while Nifty lost 24.50 points or 0.30 per cent to close at 8,200.70 points. BSE100 and BSE200 lost 0.18 per cent and 0.02 per cent respectively while SE500 gained 0.02 per cent. BSEMIDCAP gained 1.15 per cent whilst BSESMALLCAP lost 0.25 per cent. Top sectoral gainer was BSEREALTY up 2.37 per cent followed by BSEAUTO and BSEBANKEX up an identical 0.51 per cent. Top loser was BSECAPGOOD down 1.79 per cent followed by BSECONDUR down 1.31 per cent and BSEIT down 1.31 per cent.
Top gainer in stocks from the benchmark indices was Bharti Airtel up 3.38 per cent. Other gainers were PSU banks Union Bank up 9.15 per cent and Canara Bank 4.37 per cent. In other stock, Gujarat Gas was up 21.64 per cent, Jindal Steel 8.91 per cent and Wockhardt 7.66 per cent. The losers were led by Hind Petro down 5.07 per cent followed by G.E.Shipping 5.09 per cent. Other losers included Hindalco 3.46 per cent and Bhel 2.71 per cent.
December futures expired on Wednesday at 8,174.10 points losing 320.10 s or 3.77 per cent. This is only the second time in the calendar year that futures have expired lower than the previous month. The only other time was in January. Open interest for January 2015 has also reduced by 5 per cent to R 78,000 crores against R 82,000 crores. Dow Jones continued to rise and make new all-time highs. Dow closed at 18,053.71 points, a gain of 248.91 points or 1.60 per cent. NASDAQ made a 14 year high while S&P also made new high. All this is at the back of solid growth of 5 per cent recorded by the US economy.
The Indian rupee weakened 36 paisa or 0.41 per cent to close at R 63.55. FIIs continued to be sellers and sold equity worth R 2,285 crores while domestic institutions were buyers of R 1,831 crores. It appears that LIC is a big buyer of equity in these falling markets.
Parliament’s winter session ended on Tuesday and while Lok Sabha did business, it was the Rajya Sabha which was interrupted continuously and work was hampered. The government has promulgated ordinance for the coal blocks and for increasing FDI in insurance sector. Results for the Jharkhand assembly show that BJP has secured majority, while in J&K they have emerged as the second largest party after PDP. It may take some time before the government is formed but having swept the election in Jammu and not won a single seat in Kashmir, it is apparent that the government formation will be crucial for all parties. When the budget session begins it appears imminent that the NDA would have added some allies to its kitty to make life easier in the Rajya Sabha as well.
India, which was the top performing market in the calendar year 2014 conceded the top spot to China who had a great performance in November. The worst performer was Russia with sanctions, oil price crash and then the crash of its currency the Rouble.
There is a conscious effort now visible on the part of overleveraged groups, to reduce the debt on the balance sheet by selling some businesses. Earlier, this used to be a ritual with the same remaining just on paper and no action actually being taken. This time around, we find that some of these groups like the Jaypee group, Thapar group and Kishore Biyani group amongst others have actually sold profitable and going concerns to reduce debt. This is a good sign and would benefit industry as a whole. On the other hand, one finds that RBI too is getting tough and has introduced the concept of ‘uncooperative borrowers’ to increase the pressure on non performing companies.
End of the year
The year is coming to an end and there are just three trading sessions to go. If I had to pick and choose one person who has changed my life or the nation, it would be just one person, ‘NaMo’. The present PM right from the time that he was chosen as the BJP’s candidate till date has amazed and made one sit up and think.
He has won accolades from political people around the world. Be it the US, Japan, China or Australia, he has made world leaders recognise the rising power that is India and most importantly made us as common citizens feel proud to be Indians.
The week ahead would see heightened volatility on account of lower volumes, and the midcap space could see some wild movements as NAV propping is done in the remaining three trading days of the year. We will trade on January 1, 2015 while many markets would be closed. Trade cautiously.
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.
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