New Year sees the market dip on the first three days

Finance Minister Arun Jaitley speaks on the last day of Parliament winter session in New Delhi on Friday PicPTIThe New Year began on a not so promising note for the markets with them being under pressure for the first three days However trading on Thursday and Friday swung the mood and helped markets recover lost ground and post gains for the opening week of calendar year 2018 The BSESENSEX gained 9702 points or 028 per cent to close at 3415385 points NIFTY gained 2815 points or 027 per cent to close at 1055885 points The broader markets saw the BSE100 BSE200 and BSE500 gain 058 per cent 070 per cent and 089 per cent respectively BSEMIDCAP gained 137 per cent while BSESMALLCAP gained 241 per centGains reignThe top sectoral gainer was BSEMETAL up 454 per cent followed by BSECONDUR 445 per cent and BSECAPGOOD 378 per cent The top loser was BSEOILampGAS down 076 per cent followed by an identical 076 per cent in BSEAUTO and BSEIT down 073 per cent In individual stocks the top gainer was Tata Power up 577 per cent followed by Coal India 565 per cent and Yes Bank 540 per cent The top loser was BPCL down 640 per cent followed by Eicher Motors 356 per cent and Maruti 315 per centGoing strongThe Indian Rupee continued its strong showing and was up Rs 6337 to the US Dollar Dow Jones was on a roll and gained 57665 points or 228 per cent to close at 2529587 points Dow Jones is also making new record life times highs continuously Gains of this kind have not been seen on the Dow for a long timeIssue eyePrimary markets had a great time last year and one saw record fund raising happening in terms of amount raised and the number of issues to hit the market Further the SME segment has seen unimagined traction and has fared even better than the main board in terms of offerings during the year By and large for every issue on the main board the SME has seen double the number of issuesKicking offThe first issue on the main board kicks off in the week with Apollo Micro Systems Limited tapping the capital markets with its fresh issue to raise Rs 156 crore in a price band of Rs 270275 There is a discount of Rs 12 for eligible employees and retail investors The company is an electronic electromechanical engineering design manufacturing and supplies company It designs and develops high performance mission and time critical solutions for defence space and home and security It would be appropriate to state that the company is a critical midsize Make in India for defence applications The issue is being offered at a priceearnings multiple of 1994 to 2031 times The business is working capital intensive and the major object of the issue is raising funds for working capital The issue opens on Wednesday January 10 and closes on Friday January 13Movement microscopeValuations continue to increase at a much faster pace than one would ever expect The markets are certainly very expensive but excess liquidity is not permitting the correction to happen Every dip is a buying opportunity and investors taking that cue are being rewarded by the market movement To add fuel to the fire is the fact that global markets have also had a great year and the Dow is leading from the front Is there therefore any cause for worryDamage controlThere are a couple of factors which could cause serious damage to the ongoing rally The first is the run up in crude oil prices which is now at a crucial level Any further increase from here could hurt India quite badly and impact our economy and therefore our markets adversely Second the GDP numbers announced last Friday are not to encouraging and indicate that proactive steps to kickstart the economy may be announced in the budgetTightrope timeThe country goes to its general elections in AprilMay 2019 which is now 15 months away The budget to be announced on February 1 is the last full budget for the government of the day Keeping this in mind where they must walk the tightrope keeping the fiscal deficit in check and simultaneously ensuring that the economy needs to be given a boost and the electorate won over may be the proverbial last straw on the camels backCaution cuesThe last two days movement in the markets have given a fresh impetus to the markets and the rally which is currently on This augurs well for the bulls and they have the momentum on their side Markets would be volatile with a positive bias in the coming week Investors would be well advised to be cautious at higher levelsArun 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 onlyCatch up on all the latest Mumbai news current affairs from Mumbai local news crime news and breaking headlines hereDownload the new midday Android and iOS apps to get 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