Global scenario results in super volatile phase that is likely to continue

Customers look at Tesla cars in Hangzhou in China China is ready to pay any cost in a trade war after Donald Trump threatened an additional 100 billion in titfortat tariffs on Beijing PicAFPChina OUTTrading for the first week of the new financial year 201819 ended on a positive note The BSESENSEX gained 65829 points or 196 per cent to close at 3362697 points NIFTY gained 21790 points or 211 per cent to close at 1033160 points The broader indices saw the BSE100 BSE200 and BSE500 gain 235 per cent 260 per cent and 276 per cent respectively BSEMIDCAP was up 382 per cent while BSESMALLCAP was up 497 per centThe top sectoral gainer was BSEAUTO up 532 per cent followed by BSEHEALTHCARE 386 per cent and BSEPOWER 307 per cent There was just one loser in BSECONDUR down 031 per cent In individual stocks the top gainer was Tata Motors up 1000 per cent followed by Aurobindo Pharma 1008 per cent Lupin 914 per cent and Bosch 857 per cent The top loser was Bharti Tele down 350 per cent followed by HCL Tech 178 per cent and Axis Bank 174 per cent Dow Jones was extremely choppy and saw sharp movements It lost 17036 points or 071 per cent to close at 2393275 points The Indian Rupee gained 20 paisa or 031 per cent to close at 6497Four scoreThere were four issues which listed last week but unfortunately the tone of them was by and large negative The first to list was Sandhar Technologies Limited which had issued shares at Rs 332 The share debuted with gains but selling pressure saw the share close with losses at Rs 322 down 285 per cent Weekly close was up 280 per cent Shares of Karda Construction Limited listed with losses of 20 per cent on day one The company had issued shares at Rs 180 They recovered some of the losses and closed for the week at Rs 1652 down 819 per centThe third share was ICICI Securities which issued shares at Rs 520 and had a disastrous debut losing Rs 75 or 144 per cent The loss during the week increased marginally and the share closed at Rs 44060 a loss of 1527 per cent The final share to list was Mishra Dhatu Nigam Limited which had issued shares at R 90 and remained unchanged At the end of the week the same was at Rs 9025 a gain of 028 per centLooking aheadIn the week ahead shares of Lemon Tree Hotels Limited would list on the bourses The response from noninstitutional investors was poor and the issue in both HNI and Retail categories remained undersubscribed QIBs who had subscribed to the issue need to turn buyers on day one otherwise the share could suffer lossesCEO of ICICI Bank Chanda Kochhar is in the thick of controversy regarding impropriety and quid pro quo issues involving Videocon and her husbandrsquos renewable energy firm Her brotherinlaw runs an advisory firm which has dealings which coincidentally have borrowed from ICICI Bank He has been questioned over the last three days and advised not to leave the country without informationpermissionThere was a whistle blowerrsquos complaint about the wrong doings in the above matter One wonders what the need was to give a clean chit without hiring the services of an outside agency and having the issue examined The clean chit by the board puts the onus on the board members and effectively makes them liable for any action that may be subsequently taken on the CEOBoiling pointLast week saw the monetary policy committee meet for its review and it kept key interest rates unchanged on expected lines Markets have turned super volatile on trade wars between US and China There can be no winner in this conflict and it is harmful to all Volatility on this count has ensured that traders are worried about carrying positions overnight as markets open gapup or gapdown on a regular basisThe benchmark indices are lower by about 8 per cent from the highs of January 29 2018 while Dow Jones is 11 per cent lower Markets are likely to gain in the coming week but will continue to remain volatile To trade wars we have a local flavour ICICI Bank which has been added to the same This would keep the pot and markets boiling Investors should use dips to build a portfolio or buy shares while traders should avoid overnight positionsArun Kejriwal is founder of the Mumbaibased advisory firm Kejriwal Research amp 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