Super volatile market all this while as NDA scripts landslide win

The markets last week were super volatile They opened with a gap post the exit polls which were telecast on Sunday evening The actual election results saw the National Democratic Alliance NDA led by the Bharatiya Janata Party BJP living up to in some cases and beating the estimated exit polls comfortably in others while registering a landslide winHighs lowsVolatility during the week saw BSESENSEX make a high of 4012496 points and a low of 3857004 points an intra week move of 1550 points Similarly NIFTY made a high of 1204115 points and a low of 1159170 points for a weekly move of 450 points Election day results saw the typical sell on news phenomenon and markets after gaining intraday over 1000 points on the BSESENSEX closed with net loss of 300 points while NIFTY after gaining 305 points lost 120 pointsIndian National Congress INC president Rahul Gandhi gestures while talking to Sonia Gandhi during a Congress Working Committee CWC meeting in New Delhi on May 25 PicAFPGains waneBSESENSEX gained 150395 points or 396 per cent to close at 3943472 points while NIFTY gained 43695 points or 383 per cent to close at 1184410 points The broader markets saw BSE100 BSE200 and BSE500 gain 401 per cent 411 per cent and 423 per cent respectively BSEMIDCAP was up 445 per cent while BSESMALLCAP was up 585 per centThe top sectoral gainer was BSECAP GOODS which gained 1092 per cent followed by BSEREALTY up 1075 per cent and BSEBANKEX 706 per cent The top loser was BSEIT down 186 per cent followed by BSETECK 095 per cent and BSEFMCG 035 per cent In individual stocks the top gainer was Bank of Baroda up 2231 per cent followed by Indus Ind Bank 2009 per cent and Larsen and Toubro 1336 per cent The top loser was ITC down 373 per cent followed by Dr Reddy 306 per cent and TCS 223 per centBullish trendFIIs were bullish and bought on four of the five trading days Their net purchases during the week was Rs 5900 crore Dow Jones was down 17831 points or 069 per cent to close at 2558569 points The Indian rupee gained 69 paisa or 098 per cent to close at Rs 6953Suddenly there seems to be global tension which is taking over the world markets The China US trade wars seem to be never ending To top that there is tension between US and Iran US and Venezuela and now Donald Trump has declared a state of emergency to clear sale of ammunition to Saudi Arabia UAE and Jordan UK premier Theresa May is to quit on June 7 as the Prime Minister after yet another failed Brexit deal Oil continues to be volatile with so much of geo political action but on a softer trendThe trajectoryAfter Indian elections and a solid mandate followed by a stupendous rally what next Looking at the tension it may be said that India and its economy looks set to register growth We have everything in place and oil now looking to settle at lower levels would help in making matters easier If the monsoon holds true things should be moving for the countryThe focus would be on infrastructure creation and the Bharatmala and Sagarmala projects would be continued vigorously This would help in job creation as well As far as markets go the next agenda would be cabinet formation and then the budget which would be presented in July As the same government continues a lot of work on budget has already been done This year one could see some progress being made on strategic stake sale by DIPAM as well and this is always welcomed by the marketsThe developmentsThere were a lot of developments in the week gone by Reliance Capital has sold its stake in Reliance Nippon Asset Management Company to its equal partner Nippon Life at R 230 This incidentally is below the issue price of Rs 252 during the IPO which was done during November 2017Naresh Goyal and his wife Anita Goyal the promoters of now grounded airline Jet Airways were not allowed to leave on a flight to Dubai on Saturday A look out notice was issued against them and the flight which they had boarded was called back and they made to deplaneThe top management of Manpasand Beverages was detained under judicial custody by the Commissioner of Excise and Customs Vadodara for taking bogus credit of input credit under GST The company is already under the radar when its auditors resigned same time last year The share would again be under severe pressure when trading resumes on Monday morningThe bullringThe week ahead sees May futures expire on Thursday May 30 The present value of NIFTY at 1184410 points is higher by 20230 points or 174 per cent It is a clear advantage for the Bulls and with the kind of volatility witnessed during the month Bulls should be able to have the upper hand With election results declared and the uncertainty over the volatility index levels have dropped by almost half and the premiums have significantly reduced With the benchmark indices having performed and gained significantly it would be quite logical to now expect the midcap and smallcap to play catch upThree ratesThe rally in the market has not peaked and this could be the beginning of yet another rally The political mandate gives the markets yet another chance to prove and register growth in corporate performance Implementation of GST has happened and things are falling in place The talk is of a single GST rate When and at what rate that should happen is still debatable If however we even manage three broad rates it would be great progressStock talkInvestors would do well to look at the midcap and smallcap sectors as the next leg of the rally would be in these stocks A preview of the same was available recently where one saw these indices gain significantly more and outperformed the benchmark indices Having said that it does not mean one can go and buy just anything One has to buy stocks or invest in stocks which have performance and have registered growthInvest cautiously and with a longerterm horizon The market has a long way to go but it will have its up and downs It certainly will not be a oneway streetArun 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 crime news current affairs and also a complete guide on Mumbai from food to things to do and events across the city here Also download the new midday Android and iOS apps to get latest updates