Struggling to shine

The markets were on expected lines for the first four days of the week and remained down European Central Bank Chief Mario Draghi announced on Thursday that ECB would buy unlimited quantity of bonds and this acted as a very big trigger for markets globally The US markets made multi year highs but are yet to reach their lifetime highs In India the SENSEX gained 337 points while the NIFTY gained 104 points This sharp rally purely on account of global factors was enough to turn the negative mood into positive and the markets closed with substantial gains for the week which had an extra trading session on Saturday of 90 minutes BEIJING CHINA A peddler rests on his trishaw Chinarsquos upcoming political changes represent a breakthrough chance to boost its economy by accelerating reforms and fostering innovation a European business group saidu00a0 Gainers and losers The BSE SENSEX gained 32009 points or 184 per cent to close at 1774965 points The NSE NIFTY gained 10020 points or 191 per cent to close at 535870 points The broader indices like the BSE500 BSE200 and BSE100 gained 175 per cent 173 per cent and 169 per cent The BSE MIDCAP gained 229 per cent while BSE SMALLCAP gained much less at 158 per cent The sectoral gainers included BSE IT up 420 per cent BSE AUTO up 324 per cent and BSE REALTY up 272 per cent The smallest gainer this time was BSE FMCG up a mere 010 per cent In individual stocks the gainers included Maruti up 623 per cent Infosys up 518 per cent Tata Motors up 511 per cent and Hind Unilever up 420 per cent The losers included BHEL down 553 per cent JSW Steel down 23 per cent UTI Bank down 210 per cent and IGL down 173 per cent The markets have more or less recovered the previous weekrsquos losses this time around The worrying factor is the gains made were only on global cues and had nothing to do with India FIIs continued their buying and bought stock worth R766 crore against the previous weekrsquos buying of R3500 crore Domestic institutions sold shares worth R240 crore The Indian Rupee gained marginally and closed at 5536 The IPO on SME exchange of Thejo Engineering was subscribed 153 times The NCD issue from IIFL was also subscribed Another bond issue opens this week from Shriram City Union The company plans to raise R500 crore in two tenures of 3 years and 5 years The bonds which have been rated AA by CRISIL are secured and offer a coupon of 1150 per cent for 3 years and 1175 per cent for 5 years Gold is at a new high in India and has touched a new level of R32000 per 10 gms The international price of gold had reached a high of 1925 in September 2011 and then touched 1825 in February 2012 The current price is 1750 The difference is the depreciation of the Indian Rupee which has lost over 21 per cent in the last 12 months Gold is primarily considered a safe investment and international prices rise whenever there is global turmoil or concern on the health of the financial sector India is a traditional buyer of gold and every household would have collected gold over the years In earlier times the only way one could collect or invest gold was buying physical gold In current times one has multiple opportunities where gold can be invested in through ETF Exchange Traded Funds holding gold in demat form in multiples of 1 gram which can be converted into physical gold when required physical gold and of course through speculation on the commodity exchanges The last week of the Monsoon session of Parliament was a washout on the lsquoCoalgatersquo affair CBI has begun investigating the companies involved in the matter and many more connections with politicians and people who have been favoured would emerge The fight which began in Parliament would now be fought in the media and maybe the streets as well The immediate trigger for the markets going forward would be reforms and steps to contain the fiscal deficit Expectations of increase in petro product prices always remain an eternal hope but Petroleum Minister Jaipal Reddy on Friday September 7 had ruled out any immediate price rise State elections are due in Gujarat in midNovember and the election code would be in place sometime endSeptember which gives roughly 20 days for reforms Itrsquos a tall order and one should keep onersquos fingers crossed The week ahead would be crucial for the markets simply because of the huge rally of the previous week being on purely global cues There have been no local factors driving the rally and therefore the same may not be sustainable This puts the markets in a vulnerable position Crucial levels for the rally to continue would be 18000 and then 18225 on the SENSEX and 5450 and then 5515 on the NIFTY For the markets to remain positive the levels of 17400 and then 17225 on the SENSEX and 5250 and then 5175 on the NIFTY must hold The week ahead is likely to see corrections in case there are no positive local drivers The market has a negative bias and there could be positive news from RBI when they meet for their midquarter review The BSE SENSEX has support at 17705 points then at 17565 points then at 17409 points then at 17251 points and finally at 17055 points It has resistance at 17783 points then at 17931 points then at 18040 points then at 18255 points and finally at 18453 points The NSE NIFTY has support at 5346 points then at 5305 points then at 5260 points then at 5215 points and finally at 5155 points It has resistance at 5368 points then at 5395 points then at 5448 points then at 5505 points and finally at 5565 points 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 risku00a0