The ground slips away

Union Finance Minister Arun Jaitley left makes a point with Revenue Secretary Hasmukh Adhia addressing the media after the GST Council in New Delhi PicPTIVolatility increased substantially and we saw markets lose significant ground The BSESENSEX lost 80226 points or 280 per cent to close at 2786596 points while NIFTY lost 22040 points or 250 per cent to close at 861115 points The broader indices saw the BSE100 BSE200 and BSE500 lose 236 per cent 213 per cent and 207 per cent respectively BSEMIDCAP lost 124 per cent and BSESMALLCAP lost 137 per cent losing less than the benchmark indices There were no sectoral gainers but the one to lose the least was BSEIT down 068 per cent The losers were led by BSECAP GOOD down 355 per cent Other losers included BSEREALTY 373 per cent BSEFMCG 326 per cent and BSEBANKEX 311 per centIn individual stocks the gainers were led by Cairn India up 170 per cent Other gainers included TCS 125 per cent and Vedanta 121 per cent The losers were led by BHEL down 790 per cent followed by ICICI Bank 717 per cent Cipla 506 per cent ITC 485 per cent Hind Unilever 462 per cent and Larsen amp Toubro 434 per cent Last week one has noticed that a large number of heavyweight stocks have lost around 5 per cent each bringing the benchmark indices down Also the current level of the SENSEX and NIFTY was last seen in July 2016Weakness seenThe Indian Rupee gained 4 paisa or 006 per cent to close at Rs 6665 Dow Jones gained 4670 points or 026 per cent to close at 1830815 points NIFTY September series expired at 859125 points which was a mere 095 points lower than the previous expiry This was after the series was up almost 240 points before the last week began The markets were due for a correction but they found a reason when the army announced surgical strikes on terror launch pads Thursday saw a loss of 465 points on the SENSEX but the weekly loss was 802 points This means that weakness had set in earlier itself Starting the week of October 10 quarterly results for July to September would begin One is not expecting too much from them but some positives are likelyOn issuesThe primary markets saw two listings during the week The first was GNA Axles which had through a fresh issue of 63 lakh at Rs 207 raised Rs 130 crore The issue was subscribed 55 times Shares began trading in the trade to trade segment from Monday and closed at Rs 22705 a gain of Rs 2005 or 1005 per cent On listing day shares had touched a high of Rs 260 The beginning is good and one would like to see the results for the JulySept quarter before forming further opinion on the stock The other issue to list was the mega Rs 6000 crore issue from ICICI Prudential Life Insurance Company Limited The company had through an offer for sale raised the above amount at Rs 334 The share had a decent start but was unable to trade at any premium There was selling pressure and some amount of panic in the afternoon which saw the share make a low of Rs 29550 on listing day The share recovered on Friday and closed at Rs 31010 a weekly loss of Rs 239 or 716 per centWise companyContinuing with the primary market Endurance Technologies Limited which is an auto ancillary taps the market with its offer for sale of 246 crore shares in a price band of Rs 467472 The company would be raising Rs 1161 crore The issue opens on Wednesday October 5 and closes on Friday October 7 The company is into four broad verticals of aluminum casting and machining suspension transmission and braking systems The company has 25 plants in India and Europe In India it supplies to two three and four wheelers while in Europe it supplies to only four wheelers Roughly 70 per cent of its revenues come from India while the balance comes from Europe It reported a top line on a consolidated basis of Rs 5274 crore and a net margin of 55 per cent The net profit was Rs 292 crore The shares are being offered at a price earnings multiple of 2280 times on a consolidated basis based on March 2016 annual resultsCaution pleaseMarkets are tired and have lost momentum There is likely to be a small rally based on the positive feedback in relation to the success of the income declaration scheme which has received disclosures of over Rs 65000 crore Also even though bidding after five rounds in the spectrum auction was muted Rs 55000 crore has been cumulatively bid for The governmentrsquos deficit would be largely taken care of With markets behaving the way they are it makes sense to use any rallies to book profits and wait for corrections Trade cautiouslyArun 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 httpak57inDisclaimer No financial information 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 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 information published here does so entirely at his or her risk