Recovery run

MoS Finance Arjun Ram Meghwal administers the oath in the presence of Delhi BJP President Satish Upadhyay Union Minister Harsh Vardhan Opposition leader in Delhi Assembly Vijender Gupta and others during the BJPrsquos Sankalp March to fight against black money and corruption PicPTIMarkets recovered on expected lines and were up on three of the five trading days The net result was a gain of 16610 points or 064 per cent of the BSE SENSEX which closed at 2631634 points while NIFTY gained 4020 points or 050 per cent and closed at 811430 points The broader markets performed matter with BSE100 BSE200 and BSE500 gaining 063 per cent 077 per cent and 077 per cent respectively BSEMIDCAP gained 092 per cent and BSESMALLCAP 134 per cent November futures expired with massive losses and closed down 64975 points or 754 per cent at 796550 points This is the biggest monthly loss in the calendar year 2016Share fareIn sectoral gainers the top performer was BSEIT up 661 per cent followed by BSETECK 516 per cent and BSEMETAL 437 per cent A surprise gainer was BSECONDUR 291 per cent The losers were led by BSEBANKEX down 250 per cent followed by BSEAUTO 2195 and BSEPSU 082 per cent In individual stocks the top gainer was Vedanta Limited up 930 per cent followed by Hindalco 888 per cent IT stocks TCS gained 873 per cent followed by Infosys 625 per cent The losers were led by BHEL down 548 per cent followed by MampM 516 per cent Banking shares were losers with PNB down 628 per cent along with State Bank 535 per cent and Bank of Baroda 501 per centIn the coming weeks focus would shift to what the central bank would do in India and the US RBI meets on Tuesday December 6 where a 50 basis points cut is expected against the 25 basis points earlier This bigger expectation is on the basis of huge liquidity in the banking system post the November 8 demonetisation announcement RBI has increased the CRR cash reserve ratio to effectively 100 per cent post November 8 as of Saturday This means that banks would earn nothing on the cash lying in savings account of customers but would have to pay Interest rates therefore have to fall and this could be significantThere is an IPO from Sheela Foam Limited opening on Tuesday November 29 and closing on December 1 The company which manufactures mattresses under the lsquoSleepwellrsquo brand is selling shares worth Rs 510 crore in a price band of Rs 680730 It makes imminent sense to skip the share at the current time and wait for its listing before taking a call when to enterPressure continuesMarkets are in a state of flux and rallied last week on expected lines The selling and nervousness is certainly not over One should not be surprised if they are once again under pressure this week It makes sense to look at the markets with a six month horizon The current quarter which comprises October November and December would be under severe pressure and likely to report negative growth because three weeks of November would see muted sales The fourth quarter January to March would see the budget being presented and the possibility of GST being delayed looms large with opposition from political parties against the demonetisation controlling states In such a situation things would be tough in the coming few monthsWhat should an investor do I believe keeping cash in hand and doing periodic purchases in a calibrated manner over the next four to six months would be rewarding Buy shares and invest as you would do under a systematic investment plan over five to six months This would be a fruitful and rewarding exerciseDifferent strokesTimes are tough and one needs to keep resources at hand Different shares would bottom out at different times and also fare differently as people adjust to the changed environment A staggered investment seems to be the best plan of action in current situationArun 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 only