Shockingly volatile

The markets were extremely volatile and it would not be incorrect to say that they seemed to defy all logic last week There were two big day movements on Monday when the SENSEX rose 326 points and on Friday when it fell 455 points The volatile week saw the BSESENSEX gain 5597 points or 028 per cent to close at 1976030 points N R Narayana Murthy second right looks at outgoing chairman K V Kamath right as CEO SD Shibulal second left and former Chief Executive Officer Kris Gopalakrishna left look on at a press conference at the companyrsquos headquarters in Bangalore on June 1 2013 Infosys reappointed Murthy to lead the firm two years after he retired as the company grapples with weak earnings and falling market share PicAFP The NSENIFTY gained 240 points or 004 per cent to close at 598595 points The broader indices suffered minor losses with the BSE100 BSE200 and BSE500 losing 021 per cent 006 per cent and 009 per cent respectively The BSEMIDCAP gained 004 per cent while BSESMALLCAP lost 082 per cent The market was completely mixed with various sectors performing differently The top gainer was BSECONSUMER up 352 per cent followed by BSEAUTO up 270 per cent and BSEIT up 186 per cent The losers included BSEREALTY down 627 per cent BSEBANK down 226 per cent BSECAP down 189 per cent and BSEMETAL down 178 per centu00a0 Volatility The volatility in the markets seems to be reaching new levels Though the net weekly change in the SENSEX was a mere 56 points the daily net change added for the week was a staggering 992 points while on the NIFTY the change was 2 points and the cumulative 294 points This volatility captures FII buying quarterly and annual results Rupee value global markets and the political situation The movement is beyond comprehension and traders should use every rally possible to exit long positions GDP The GDP numbers for the quarter JanuaryMarch 2013 were a dismal 48 per cent which made the annual GDP for 201213 at 5 per cent the lowest in a decade This puts great pressure on the RBI Governor when he meets for the midquarter review on Monday June 17 With these dismal numbers expectations of a rate cut are now declining Depreciation FIIs were big buyers during the week pumping in over R3330 crore The disturbing fact is that they have sold over R6200 crore in the debt market in the last seven trading sessions negating the equity inflows The Indian Rupee continued to depreciate and closed at 5650 to the US dollar Domestic institutions were net sellers at R360 crore One always wondered with such strong FII inflows why the rupee was still depreciating The answer lies in the fact that there has been a stronger outflow on the debt market side Return Infosys founder and former chairman N R Narayana Murthy is back as Executive Chairman replacing K V Kamath This clearly demonstrates the failure of Kamath in bringing together the team at Infosys The shares are certainly going to rally in the coming week due to the anticipated turnaround of the company Some inclination of this was available to some people as Infosys was probably the only stock standing in the benchmark indices on Friday when the whole market just tumbled Fall May series futures ended peacefully with the NIFTY gaining 20820 points or 352 per cent The very next day the markets tumbled and recorded their greatest fall in 15 months One gets a feeling that the weakness had actually stepped in on Thursday but the markets were kept going so that rollovers would happen The fall on Friday was too big for a single day and some rebound is certain in the coming week Ahead Shares of Just Dial would list most probably on Wednesday and should trade at a substantial premium to the issue price of R530 The issue was oversubscribed over 1160 times It is expected that there could be an 1820 per cent premium to the issue price The last date for complying with the 25 per cent minimum public shareholding expires on Monday June 3 for private companies The number of Offers For Sale OFS has increased quite sharply but we still have several companies who are yet to comply These companiesrsquo shares could be under pressure on Monday depending on what action SEBI takes for noncompliance Key levels for the SENSEX are 19550 and 20200 while similar levels for the NIFTY are 5925 and 6135 respectively The BSESENSEX has support at 19561 points then at 19445 points then at 19284 points and finally at 19136 points It has resistance at 19945 points then at 20146 points then at 20254 points and finally at 20443 points The NSENIFTY has support at 5935 points then at 5867 points then at 5789 points and finally at 5675 points It has resistance at 6069 points then at 6135 points then at 6180 points and finally at 6235 points Trade cautiously and as mentioned earlier use any rally to exit long positions 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 httpak57in Disclaimer 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 risk