Take a chill pill

Professionals work on the floor of the New York Stock Exchange NYSE The Dow Jones industrial index notched its sixthstraight positive quarter marking the best run for the Dow since 2006 PicGETTY IMAGESMarkets ended the week on a positive note The BSESENSEX gained 19910 points or 068 per cent to close at 2962050 points NIFTY gained 6575 points or 072 per cent to close at 917375 points The broader markets saw the BSE100 BSE200 and BSE500 gain 081 per cent 096 per cent and 117 per cent respectively BSEMIDCAP gained 179 per cent while BSESMALLCAP was up 253 per cent In sectoral gainers the top performer was BSECONDUR up 548 per cent followed by BSECAPGOOD 226 per cent and BSEPOWER 175 per cent On the losing side were BSEIT down 070 per cent followed by BSEMETAL 046 per cent and BSEHEALTHCARE 029 per centFinance Minister Arun Jaitley r and MoS SS Ahluwalia at Parliament in New Delhi on Friday during the Budget session PicPTIRah rah for the rupeeIn individual stocks the top gainer was State Bank of India SBIacircu00c2u0080u00c2u0088up 6 per cent followed by some of the other PSU Banks like PNB 665 per cent Canara Bank 325 per cent and Bank of Baroda 231 per cent The losers were led by Idea Cellular down 567 per cent followed by Hero Moto 452 per centThe Dow Jones gained 6650 points or 032 per cent to close at 2066322 points The Indian Rupee continued its strong showing and gained 56 paisa or 086 per cent to close at Rs 6485With the end of last week the financial year 20162017 has also come to an end and it has been satisfactory from the stock market perspective The BSESENSEX ended the year with gains of 4279 points or 1688 per cent for the year at 296250 points Of this as much as 2994 points or 1124 per cent was in the last quarter of the financial year Similarly NIFTY ended the year with gains 175435 points or 1854 per cent to end the year at 917375 points Of this 988 points or 1207 per cent was in the last quarter FII flows too were positive and there were aggressive buyers in March investing Rs 30000 crore and about Rs 50000 in the financial year A look at share fare Shares of CL Educate Limited debuted on Friday on the bourse and had a very poor showing Their performance was on expected lines The company had a simultaneous fresh issue for 2180 lakh shares and an offer for sale of 2580 lakh shares in a price band of Rs 500502 The discovered price was R 398 on the BSE and Rs 402 on the NSEThe share then recovered some lost ground and closed at the 5 per cent upper circuit at R 41790 on BSE and Rs 42210 on the NSE with losses of 1675 per cent and 1592 per cent respectively What is damaging for the company at this point of time is the extremely poor volume which saw a mere 367 per cent of the IPO size being traded on day oneNormally the volume on listing day is the highest and then the same reduces It surely will take a long time before shares bought by investors change handsNifty futures for March expired on a positive note gaining 23425 points or 262 per cent for the series to expire at 917375 points They remained unchanged on the last trading day of the week as wellA couple of issuesThe week ahead has a trading holiday on Tuesday on account of Ramnavmi On Wednesday and Thursday the Reserve Bank of India RBI would be meeting for its policy reviewRates are expected to remain unchanged even though the headline inflation number is under controlConsidering the fact that rates in the US are likely to be raised going forward the RBI would certainly not want to reduce the interest rate differential between India and the US and cause a flight of money invested in debt market here They would therefore be quite happy keeping rate unchangedThe primary markets are quite buoyant these days and there are a host of issues lined up for tapping the markets midApril onwards While the mood is optimistic one should be cautious about the valuations that these issues command A couple of more issues like the education company which listed last week with losses on day one would puncture the sentiment in the market and make things for new issues that much more difficultSo much liquidityThere is too much of liquidity in the market and even though valuations are currently rich there is support at lower levels On every correction there are investors waiting to lap up shares In such an environment it is difficult to envisage any meaningful correction until it is news drivenThe budget has been passed and so has GST The states need to pass matching bills so that the roll out happens as planned on July 1 The kind of FII flows that we have seen in March which happened after election results to five states were announced is indicative of the support that the central government enjoys The belief is that reforms would pick pace and the country would register strong progress on various fronts This is the big driver for the markets and liquidityThe week ahead with a holiday and RBI widely expected to keep rates unchanged should be a quiet one Relax and wait for markets to settle down in the new financial year before any fireworks beginArun 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