Tips on using the year-end momentum to you financial advantage

Markets were extremely volatile last week specially Monday when results for the state assemblies were declared There was panic on the street when n the initial phase of counting when the Congress went ahead of the Bharatiya Janata Party BJP in Gujarat The net result was a major swing on the indices on that day The BSESENSEX made a low of 32595 points on Monday and a high of 33801 points an intraday swing of 206 points before closing at 33601 points a net gain of 139 points NIFTY similarly had 10388 points a gain of 55 pointsPrime Minister Narendra Modi and BJP President Amit Shah at a felicitation function in New Delhi after the partyrsquos win in Gujarat and Himachal Pradesh Assembly elections PicPTIThe BJP retained Gujarat in a tense and closely followed election winning 99 seats out of 182 seats In Himachal Pradesh they upstaged the ruling Congress winning 42 of the 68 seats in the state These election results have been a winwin situation in more ways than oneShock treatmentMany believe that the BJP was getting over confident and losing touch with ground reality They needed a shock treatment and to be brought down to earth By being given a fight in Gujarat it has been done Secondly the Congress is yet to get its act together and this result shows the Congress that people are willing to look at them provided they get the act together Thirdly all the noise about demonetisation and GST has been proved to be incorrect with results from Surat and all other urban cities of Gujarat where the BJP has performed very well It shows that people are for reforms and are willing to go with them The one place where the party had a setback was in Saurashtra where the cotton price issue and patidar movement hit the ruling party In short this would put BJP on alert and help in the coming elections in KarnatakaNew highsComing to the markets the BSESENSEX made new highs and gained 47733 points 141 per cent to close at 3394030 points NIFTY gained 15975 points or 152 per cent to close at 10493 points The broader markets saw the BSE100 BSE200 and BSE500 gain 169 per cent 195 per cent and 216 per cent respectively BSEMIDCAP gained 341 per cent while BSESMALLCAP was up 432 per cent In sectors the top gainer was BSE REALTY up 459 per cent followed by BSEMETAL 454 per cent and BSEPOWER 399 per cent BSEAUTO too put up a strong show gaining 385 per cent There were no sectoral losers but the one to gain the least was BSEBANKEX up 083 per cent In individual stocks the top gainer was Hindalco up 932 per cent followed by Hero Moto 750 per cent and Vedanta 579 per cent The top loser was Kotak Mahindra Bank down 198 per cent followed by Yes Bank 194 per cent and Coal India 190 per cent The Indian Rupee was virtually unchanged losing one paisa or 002 per cent to close at R 6405 Dow Jones continued to gain ad post new highs During the week it gained 10237 points or 041 per cent to close at 2475406 pointsShort weekIn primary market news the issue from Astron Paper Limited was oversubscribed a massive 24329 times QIB portion was subscribed 10336 times HNI 39699 times and Retail 7793 times Surplus liquidity continues to be the driving force behind the markets The week ahead begins with a Christmas holiday today This short trading week would see December futures expire on Thursday and the calendar year end of Friday December 29 The current value of NIFTY at 10493 gives bulls a lead of 26645 points or 254 per cent It is a good lead and markets looking positive in the immediate short term give bulls an upper hand While BJP has not done too well in Gujarat it is still enjoying the markets confidence is a good thing It is great for the markets and is the best verdict that could have been asked forThe budgetGoing forward one can safely predict that the next budget in February 2018 which would be the last budget before the election in AprilMay 2019 would be directed in providing relief to the common man It would be election oriented and would have plenty of sops The ruling government would like to take no chances With such a vantage position the budget would not be market friendly and is likely to impact the markets negatively I believe that we are near a near term top and it is a matter of time before a meaningful correction in terms of both value and time beginLooking aheadThe year ahead would be a time for selfinspection and introspection Market thinkers and people who matter to whom I spoke strongly believe that returns next year should be moderated Against the more than 25 per cent returns in 2017 high single digit returns to at best low double digit is what people should expect This effectively means we are talking of a range of 814 per cent for next year The week ahead would be volatile with a positive bias in the initial first half of the week There could be a correction towards the end of the week after NAV propping is over Use the positive momentum expected to take advantage of exiting any sharp moves in thinly traded shares Wishing all a Merry Christmas and a happy New Year 2018Arun 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 National and International news hereDownload the new midday Android and iOS apps to get updates on all the latest and trending stories on the go