Mumbai: Markets recover all they lost, end in the green once again

Former Prime Minister Manmohan Singh and Finance Minister Arun Jaitley at a book launch in the Capital PicsPTIThe week gone by had plenty of action and midweek post the Reserve Bank of India RBI meeting it looked like the correction had actually set in but by the weekend it was proved to be just another blip Markets recovered all they lost and ended in the green once again The benchmark indices continued making new highs The BSESENSEX gained 1553 points or 005 per cent to end at 3232541 points NIFTY gained 5190 points or 052 per cent to close at 1006640 points The broader indices saw the BSE10 BSE200 and BSE500 gain 068 per cent 053 per cent and 037 per cent respectively BSEMIDCAP gained 070 per cent while BSESMALLCAP lost 090 per centStock eyeThe top sectoral gainer was BSECONDUR up 666 per cent followed by BSEOILampGAS 533 per cent and BSEPSU 331 per cent The top loser was BSEHEALCARE down 372 per cent followed by BSEFMCG 160 per cent In individual stocks the top gainer was Hero Moto up 9 per cent followed by NTPC 8215 and Tata Steel 433 per cent The top loser was Dr Reddy down 885 per cent followed by Sun Pharma 802 per cent and Lupin 659 per cent Dow Jones gained 26250 points or 120 per cent to close at 2209281 points The Indian Rupee had a very strong showing gaining R 057 or 089 per cent to close at R 6358Unexpected turnRBI at its review meeting cut repo rates to 6 per cent on expected lines by 25 basis points A day earlier some talks had started of the expectation being raised to 50 basis points which did not materialise Markets took the rate cut as disappointing and corrected themselves for the next two days but bounced back on Friday Incidentally the rate cut was near unanimous and was approved with a 51 majorityFund timesThe government has launched a new ETF Exchange Traded Fund known as Bharat 22 The ETF as the name suggests has 22 stocks which also include three of the main stocks from the special fund of Unit 64 known as SUUTI These stocks are ITC LampT and Axis Bank The date of this offer has not yet been announced but one can be sure that it would happen sooner rather than later Considering the appetite of new paper in the market the size of this offering with a green shoe option could be in the region of 2 billion dollars or thereabouts and be a big help in meeting the ambitious target of R 78000 crore from divestment this yearIssue viewThe IPO from Cochin Shipyard was a runaway success and garnered subscription of R 111 lakh crore for an issue of R 1468 crore This issue has probably raised the second highest amount after the issue of Coal India which was for R 15500 crore and saw subscription in the region of 155 lakh crore The issue from Cochin Shipyard was subscribed 7619 times with QIB portion subscribed 6352 times HNI 28887 times and Retail 851 times The issue received 2075 lakh applications surpassing the previous best of 2013 lakh applications of HUDCO another PSU offering a couple of months agoResult routeResult season has entered the last fortnight and the bulk of the results would be up for declaration in this period While there have been some pleasant surprises and some unpleasant ones as well it is more of a balance so far This fortnight would decide the trend for the quarter and the way corporate India is headed going forwardOverheated nowMarkets are looking overheated and richly valued Liquidity is of course too much and is not allowing any meaningful correction or consolidation to take place What appeared to be the beginning of a much needed correction post the RBI meet turned out to be a mere blip and markets again started gaining ground in just about 48 hours One thing is for sure that the next correction would not be so shortlived and would take much longer and be much deeperSome adviceWhat should an investor do Take some money off the table and allow the markets to present an opportunity to reenter Even if one looks at the current fall during the week gone by it was an opportunity to reenter but only those who had sold earlier could take it While the going is still great with new tops being made in a routine manner the incline is getting steeper and the riskreward ratio that much more against oneEnjoy the rally as long as it lasts but to enjoy it even more take something off the table and look for corrections to reenter Opportunities will be available sooner rather than laterArun Kejriwal is founder of the Mumbaibased advisory firm Kejriwal Research amp Investment Services Pvt LtdDisclaimer 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