Sharp and surprising

Protesters gather to denounce President Donald Trumps executive order that bans certain immigration at DallasFort Worth International Airport PicGetty ImagesAFP The markets were booming last week and registered sharp gains even though they were open for just four trading days The BSESENSEX gained 84796 points or 314 per cent to close at 2788242 points NIFTY gained 29190 points or 350 per cent to close at 864125 points The broader markets saw the BSE100 BSE200 and BSE500 gain 356 per cent 350 per cent and 346 per cent respectively BSEMIDCAP was up 303 per cent while BSESMALLCAP was up 275 per cent The markets have crossed the level of November 8 2016 which was the day that demonetisation was announced These levels were 2759114 on the BSESENSEX and 854355 on the NIFTYThe top sectoral gainer was BSEMETAL up 593 per cent followed by BSECONDUR up 555 per cent and BSEPSU 546 per cent There were no sectoral losers and the least performing was BSEIT up a mere 053 per cent In individual stocks the top gainer was HDFC up 1083 per cent Hindalco 1123 per cent SAIL 910 per cent and Kotak Mahindra Bank 864 per cent gained Losers were led by Infosys down 070 per cent and Sun Pharma 019 per centStumped by TrumpThe Indian Rupee gained 14 paisa or 021 per cent to close at R 6804 Dow Jones finally crossed 20k and during the week gained 26653 points to close at 2009378 points Donald Trump is just about a week old as American President but he seems to be ruffling a lot of feathers Donald Trump will surely keep the pot boiling and markets will be on tenterhooks as they settle down to understanding Donald TrumpFollow this fundIn primary market news the CPSEETF follow on fund is expected to list on Tuesday January 31 The fund had received excellent response and allotment would be made to only retail and pension funds The offer from sale from Asias oldest exchange BSE Limited received overwhelming support and was subscribed over 51 times The retail portion saw subscription from 1195 lakh applicants which is a new record beating the previous one set by LampT Infotech last year when they received 1090 lakh applications BSE is expected to list on FridayPermitted to tradeShares of BSE Limited would list on NSE as selflisting is not permitted However there is a category known as permitted to trade category where shares are traded and there is no obligation or responsibility of the company or the exchange in terms of disclosures and reporting which is allowed If one goes back to the time when NSE began operations they had this category of permitted to trade Shares of BSE would be listed on NSE but would also trade on BSEThe strong rally in the markets has caught many by surprise including me Couple of factors which could be attributed are the results for the quarter where the apparent effect of demonetisation seems missing Secondly the fact those FIIs who were sellers for quite some time are now buyers and seem to have changed their mind for sure The January series futures expired on an extremely positive note at 860275 points A series gain of 49915 points or 616 per cent It was a very solid performance by NIFTY and a decent part of the gain came in the last three daysPatience will payThe Union Budget will be presented on February 1 This year onwards there is no separate railway budget and it will be part of the main budget The elections to five states begin on the coming weekend It is believed that this budget would look to raising the tax slabs and also some cuts in income tax ratesAlso central outlay for schemes like MNREGA and spending on rural infra would be raised The market hopes that there is no tinkering with long term capital gains tax One thing likely could be an increase in STT on derivatives and trading while there could be some reduction in STT on deliveryThe week ahead would be volatile Wait for the budget before taking fresh positions 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