A wild time

It was a wild week at the markets and last Thursday shook the markets completely The SENSEX was down 188 points at the low of the day and then gained 391 points to close the day with gains of 208 points The intraday swing was 579 points and the net change 208 points This wild move pretty much saved the day otherwise we could have given up most of the previous weekrsquos gains The week saw the BSE SENSEX losing 25567 points or 130 per cent to close at 1942756 points The NIFTY lost 7310 points or 123 per cent to close at 587260 points The broader market saw the BSE100 BSE200 and BSE500 losing 126 per cent 127 per cent and 131 per cent respectively The BSE MIDCAP and BSE SMALLCAP lost 156 per cent while the smallcap lost 244 per cent Nicosia CYPRUS A woman walks past postcards displayed outside a souvenir shop in the Cypriot capital Nicosia The Cyprus government postponed a planned emergency session of parliament to debate a controversial EU bailout PicAFP Gainer The BSE FMCG was the gainer up 148 per cent The other gainer was BSE HEALTH up a tad at 001 per cent The losers included BSE CONSUMER down 391 per cent BSE BANKEX down 296 per cent and BSEAUTO down 230 per cent In individual stocks Hindustan Unilever was up 452 per cent Tata Coffee up 424 per cent Jet Airways up 371 per cent and State Bank up 263 per cent On the losing side were ICICI Bank down 632 per cent National Aluminum down 1013 per cent and Bajaj Auto down 795 per cent Action The week had plenty of action with the government completing divestment in two companies RCF and National Aluminium The floor price for RCF was Rs 45 and the issue through which Rs 311 crore was raised was bailed out by LIC buying close to 48 per cent The issue received bids at the floor price and the indicative price was Rs 4502 The condition of National Aluminium was worse with the issue receiving bids for about 61 per cent of the offer including the additional offer at the floor price of Rs 40 Here again LIC did the rescue act and it would be known today or tomorrow what quantity they subscribed A total of Rs 628 crore was raised from this sale Fall In the coming week SAIL is likely to be divested In a span of a little over nine weeks the share price of SAIL has fallen from Rs 101 to just about Rs 69 In the same time the price of Tata Steel has also fallen from Rs 448 to Rs 355 but the fall in the case of Tata Steel is significantly lower The IPO from Repco Home Finance was subscribed 165 times but with the help of QIBs who subscribed their portion 339 times The HNI and Retail portion remained under subscribed Tax The week gone by had plenty of action with inflation coming in higher at 684 per cent against 662 per cent IIP data was positive at 24 per cent compared to a year ago and in the current year for the first 10 months is up 1 per cent against 34 per cent in the previous year Preliminary data on advance tax shows that of 41 large firms based in Mumbai there is a growth of 567 per cent in tax paid in the quarter Though the numbers look encouraging but they are certainly not enough to achieve the revised budget estimates for the year 201213 FIIs continued to be buyers with net investments of Rs 3675 crore while domestic institutions sold shares worth Rs 1415 crore The Indian rupee gained to close at Rs 5401 to the US dollar Repo The key event to be watched is what RBI governor does tomorrow in the monetary policy review meeting With CRR being at a near historic low level of 4 per cent there is no way any further cut can happen here it remains to be seen what is done with Repo and reverse Repo rates u00a0A cut of 25 basis points looks a certainty and the markets could get a booster dose if for any reason the same is increased to 50 basis points The most probable thing that would be done is a 25 basis points cut in Repo and Reverse Repo This would be more or less neutral for the market A buildup of the markets into Tuesday anticipating RBI action and then a sell off is the most likely scenario in the week unless the Repo and reverse Repo rates are surprisingly cut by 50 basis points Levels Key levels for the SENSEX are 19200 and 19650 while similar levels for the NIFTY are 5780 and 5975 respectively The BSE SENSEX has support at 19316 points then at 19153 points then at 19026 points and finally at 18918 points It has resistance at 19606 points then at 19728 points then at 19896 points and finally at 20035 points The NSE NIFTY has support at 5840 points then at 5792 points then at 5748 points and finally at 5668 points It has resistance at 5925 points then at 5964 points then at 6009 points and finally at 6044 points The key movements would be decided by the action taken by the RBI Governor A Repo cut of 25 basis points is already built into the current market For further momentum and movement a 50 basis points Repo cut is required Arun Kejriwal is founder of the Mumbaibased advisory firm Kejriwal Research amp Investment Services Pvt Ltd Readers are invited to read more about these and other issues on his website httpak57inu00a0Disclaimer 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 and under no circumstances should be used for actual trading or making investment decisions Readers must consult a qualified financial advisor prior to making any actual investment or trading decisions based on information published here Any reader taking decisions based on any information published here does so entirely at his or her risku00a0