Markets began trading for the week on a very strong note

People clean the street where riots took place after the G20 summit in Hamburg northern Germany Fresh clashes erupted early Sunday following the G20 summit end with protesters setting vehicles on fire PicAFPMarkets began trading for the week on a very strong note gaining about one percent on Monday itself This helped in maintaining the momentum and the BSESENSEX ended the week with gains of 43902 points or 142 per cent to close at 3136063 points NIFTY gained 14490 points or 152 per cent to close at 966580 points The broader markets saw the BSE100 BSE200 and BSE500 gain 168 per cent 165 per cent and 175 per cent respectively BSEMIDCAP was up 203 per cent while BSESMALLCAP gained 273 per centGainers and losersThe top sectoral gainer was BSEREALTY up 554 per cent followed by BSEMETAL 341 per cent and BSEFMCG 248 per cent There was only one sectoral loser during the week in the form of BSEIT down 048 per cent In individual stocks heavyweight Reliance Industries was the top gainer up 804 per cent followed by DLF 629 per cent and Lupin 538 per cent The top loser was Bajaj Auto down 296 per cent followed by Axis Bank 248 per centDow Jones had a small gain during the week up 6471 points or 030 per cent to close at 2141434 points The Indian Rupee remained relatively stable losing one paisa or 002 per cent to close at Rs 6459In primary market news one saw the listing of GTPL Hathway Limited It was a quiet listing and the share managed to close above the issue price of R 170 The weekly close was better at R 17870 a weekly gain of 512 per centMerger newsThe news of the week was IDFC and Shriram group the NBFC and truck finance company entering into an agreement to explore the possibility of a merger during a 90day exclusivity period The final outcome and ratios are undecided but the counters of these companies would be in the thick of action in the week Expect both to see substantially higher volumes and interested action Also with a 90day period announced there would be various combinations and permutations floated and markets would react to the sameInfosys eyeThe results for the quarter April to July would kick off during the week with TCS declaring results on Thursday July 13 followed by Infosys on Friday July 14 Results from these two companies would give very good indications about how this sector is facing and whether the slowdown and visa issues are resolved One hopes that in the case of Infosys the issue of back seat driving is also taken care of There used to be a time when Infosys would kick off the results season and be the first to declare amongst the SENSEX or NIFTY group They have lost even this position and TCS would be ahead of them This is possibly an indication of changing timesLiquidity lookThe biggest factor driving markets currently is liquidity The amount of inflows of domestic mutual funds is far in excess of their best ever and probably even greater than their wildest dreams With this kind of liquidity and a market which already is expensive the resultant effect could be explosive Take the case of recently listed CDSL This share had listed a week ago and registered impressive gains on debut day in the previous week The shares were issued at R 149 valuing the company at 18 times historical earnings Friday July 7 saw the share trade a massive 38221 lakh shares against an IPO size of 351 lakh shares The delivery volume was a mere 3659 lakh shares or 957 per cent The share made an intraday high of R 34480 and closed at Rs 33115 a gain of R 3725 or 1267 per cent The share which was issued at 18 times valuation is now 40 times The whole valuation feels really expensive and makes one wonder what is happening If this is entirely because of liquidity it is dangerous and detrimental to the health of the market If it is something else we will learn of it in the coming weeksBe carefulMarkets recovered ground from the levels where they were stuck over the last five to six weeks Having recovered ground they now appear to be out of a dangerous situation where they could slip into serious correction any time soon In the immediate term a correction may or may not happen but with results to be announced there would always be hope and expectancy in the coming weeks about performanceMarkets would continue to be volatile and present one with ample trading opportunities Use them judiciously as the markets are overheated and only need a trigger to turnArun 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