GST Bill hope from Monsoon session

The week gone by was extremely choppy and had wild swings through and on intraday as well The Sensex gained 26107 points or 103 per cent to end the week at 2548957 points Nifty gained 8145 points or 105 per cent to close at 781490 points The broader markets saw BSE100 BSE200 and BSE500 gain 107 per cent 113 per cent and 124 per cent respectivelyFinance Minister Arun Jaitley l greets Rajya Sabha MP Jaya Bachchan r during the last day of the Budget session of Parliament in New Delhi on Friday PicPTIBSEMIDCAP gained 174 per cent and BSESMALLCAP gained 124 per cent In sectoral gainers the top performer was BSEBANKEX up 270 per cent followed by BSETECK 171 per cent BSECAPGOODS 161 per cent and BSEIT 157 per cent The losers were led by BSEMETAL down 221 per cent followed by BSEOILampGAS 072 per cent and BSEPSU 041 per centIn individual stocks the top gainer was Axis Bank up 635 per cent followed by Power Finance Corporation 512 per cent and Bajaj Auto 322 per cent The losers were led by Vedanta down 550 per cent followed by BHEL 320 per cent and Hind Unilever 258 per centSwing timesThe Sensex had wild swings on four of the five trading days with net change in excess of 200 points on two days 300 points on one day and 450 points on another day The fifth day was flat and the net result of all these gains and losses was just about one per cent at 261 points This shows the nervousness of markets and how quickly they react to news of which there was no paucity last weekThe contentious Double Taxation Treaty which has caused upheavals in the market time and again has finally been amended The treaty would impose capital gains in India for investments made from April 1 2017 Similarly SEBI has said it would look at KYC norms for Pnotes which are another bogey that surprises the markets on and off If this issue gets resolved even at the cost of reducing investment through this instrument it would be a long term positiveDow Jones lost 20531 points or 116 per cent to close at 1753532 points The Indian rupee lost 22 paisa or 033 per cent to close at Rs 6677 to the US dollarRetail or consumer inflation has moved up and immediate expectations of a rate cut have therefore receded The only possibility is that good rains improve the prospects of the crop and concerted efforts by the government reduce prices and that in turn prompts the RBI governor to cut rates However this event is now a couple of months awayBill checkThe second part of the Budget session has ended and there was some legislation which actually took place The Bankruptcy Bill was enacted while GST was just not taken up The Finance Minister has stated that they would take up the GST Bill in the Monsoon session and take the same for voting even without the Congress agreeing to pass the bill The idea is to call the oppositionrsquos bluff of just stalling this legislationSome of the PSU banks reported results for the quarter and year that ended March 2016 Losses on account of poor quality of assets seem to have hit most of them quite badly Provisions have been made but the coverage ratio has dropped quite significantly in view of the rising nonperforming assets While the BSEBANKEX was the top sectoral gainer last week its performance would be under severe stress when markets resume trading todayIn primary market news the IPO from Parag Milk Foods Limited was subscribed on extending the issue and lowering the price band The revised price band was Rs 215227 The share would list in the current week The two other issues listed last week and saw decent gainsIssue updatesThe issue from Thyrocare Technologies Limited which was issued at R446 listed on Monday The issue saw the HNI portion subscribed about 225 times and the funding cost was Rs 185190 While the share debuted at Rs 665 to reflect the funding cost the share was under immediate pressure and closed the week at Rs 62270 a gain of Rs 17670 marginally below the cost of funding HNI investors through the funding route by and large did not make any money in the issueThe second issue to list was microfinance lender Ujjivan Financial Services Limited which had issued shares at R210 The leveraged HNI investors cost of funding was R4849 which has not yet been reached The share closed at Rs 21360 on day one and at Rs 25150 a gain of 197 per cent for the week Leveraged investors lost quite a bit hereThere was frenzy in applying to these two issues through leverage and financers or NBFCrsquos increased the rate of interest for borrowing The HNI thought he would still make money considering the premium in the grey market So ultimately it was agreed on the part of all concerned which did the HNI in The regulator of course needs to look into the issue of the grey market where premiums are openly discussed in media mdash electronic or print and details can be got on your handheld phone as well Itrsquos time for immediate actionMarkets will be volatile and choppy with a downward bias in the coming week Trade cautiously