It's a volatile market, trade cautiously

The government has imposed a fine of 155 billion on Reliance Industries headed by Mukesh Ambani and its partners for lsquostealingrsquo gas from ONGC wells The company would contest the demand but the share price is likely to be under pressure File picThe markets were under pressure last week particularly the midcap and smallcap space The fall in indices of this space does not reflect the damage that has actually happened Just the other day everyone was recommending stocks from the midcap and smallcap space and suddenly one saw that these shares were just not saleable Doubledigit losses were the order of the dayThe BSE Sensex lost 66736 points or 239 to close at 2727415 points Nifty lost 20425 points or 236 to close at 843375 points The broader indices like the BSE100 BSE200 and BSE500 lost 269 282 and 294 respectively BSE Midcap lost 424 while BSE Smallcap lost 429 In sectoral gainers there were none but the sector which lost the least was BSE FMCG losing a mere 009 The top sectoral loser was BSE Healthcare down a massive 747 followed by BSE Realty 616 and BSE Oil and Gas 493In individual gainers Cairn India was up 471 followed by ITC 270 and Hindustan Unilver 110 The losers were led by Sun Pharma down 1223 followed by Dr Reddy 842 The PSU banks were under pressure after NPAs continued to haunt their performance PNB was down 898 followed by Bank of Baroda 860 and Union Bank 855Who will America chooseThe week was full of news and a lot would happen in the coming week Markets were weak on the outcome of the US elections With a straight contest which is likely to go down to the wire there has to be one winner Who would it be and who would be better for the US is highly debatableOne thing however is certain that the country has never before been so divided over elections and wounds may not heal in a long time to come Markets around the globe were under pressure when it appeared that Donald Trump had established a lead The lead since then has decreased and is currently necktoneck By Wednesday it would be clear who has won or lost Till then markets and even afterwards would be volatileThe Fed however in their meeting kept interest rates unchanged and left the December meeting as the one where probably they would take action and raise ratesFine on RelianceThe government has imposed a fine of 155 billion on Reliance and its partners for lsquostealingrsquo gas from ONGC wells The company would contest the demand but the share price is likely to be under pressureGST Council has announced rates for GST There would be four rates at 5 12 18 and 28 Half the items in the basket of consumer index would be at 0 so that inflation could be kept under check The 28 rate would also have a cess for luxury goods and sin goods The rate for gold has not been announced and would be done later in the monthTataMistry saga continuesThe Cyrus MistryRatan Tata saga is likely to be a prolonged matter with the Indian Hotels directors approving the chairmanship of Cyrus Mistry Three of Tata group companies would be meeting for quarterly results this week The spat is becoming uglier and is sending wrong signals to investorsMallyarsquos unsettled duesTwo courts have issued nonbailable warrants against Vijay Mallya The signal being sent out is that dues would have to be settled and leaving the country would not be a solutionResults from companies in the JulySeptember quarter have not provided the boost that was being expected The PSU banks have reported poor results and the turnaround is yet to happen While the slippages seem to be getting arrested the uptick could be a couple of quarters away It is this expectation which has generated interest amongst investors looking at entering the PSU Banking spaceTwo issues would be listing this week on Monday and Tuesday On Monday shares of PNB Housing which was very well received by investors would make their debut There is a premium on the shares being quoted and the same would reflect in prices The second issue is from Varun Beverages which would list on Tuesday This issue was subscribed only by QIBrsquos and the other three buckets of HNIrsquos retail and employees remained under subscribed People apparently did not like the valuations at which the shares were offeredWith markets falling continuously from lsquoMuhurat tradingrsquo a technical bounce is on the cards It however would only be a bounce and should be used for exiting positions One should wait for better opportunities to enter the market Volatility would be the order of the day Trade cautiouslyArun 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