Bulls outrun bears

Former PM Manmohan Singh, Home Minister Rajnath Singh, FM Arun Jaitley and Justice SA Bobde during the oath ceremony of Justice Pinaki Chandra Ghose as First Chairperson of Lokpal, in New Delhi. Pic/PTI

The expected correction happened but was delayed to Friday instead of Wednesday. The markets despite the correction which happened closed in the green. The BSESENSEX gained 140.29 points or 0.37 per cent to close at 38,164.61 points. NIFTY was up 30.05 points or 0.26 per cent to close at 11,456.90 points. The broader indices managed to close in the green and BSE100, BSE200 and BSE500 were up 0.09 per cent, 0.10 per cent and 0.04 per cent respectively. BSEMIDCAP was down 0.62 per cent while BSESMALLCAP was down 0.53 per cent.

In a significant development while indices registered gains for the week even though markets were down on Friday, the extent of Friday's damage does not get captured here. While BSESENSEX ended with gains of 140 points for the week, it lost 400 points from the intra-day high on Friday. Net loss on Friday was 222 points on the BSESENSEX. Similarly, NIFTY lost 116 points from the intra-day high while the days loss was 54 points. This effectively means that if the markets had not gained in the first three days we would have been staring at substantially bigger losses for the week instead of small gains.

Rupee rocks
The top sectoral gainer was BSEREALTY up 5.73 per cent followed by BSEPOWER 0.96 per cent and BSEDMCG 0.73 per cent. The top loser was BSEAUTO down 4.55 per cent followed by BSEOIL&GAS 0.96 per cent and BSEMETAL 0.64 per cent. In individual stocks, the top gainer was Hindalco up 4.87 per cent followed by India Bulls Housing 3.95 per cent and Dr Reddy 3.35 per cent. The top loser was Maruti down 7.53 per cent followed by Eicher 5.24 per cent and Lupin 5.22 per cent.

Dow Jones was under a lot of pressure on Friday and lost ground. On a weekly basis it was down 346.55 points or 1.34 per cent to close at 25,502.32 points. The Indian Rupee gained 14 paisa or 0.20 per cent to close at R 68.95. FIIs have been buyers through the week continuing the recent trend. This has helped the currency and the markets.

An extension
The issue from MSTC was finally subscribed after being extended for three days. The issue was subscribed 1.46 times with QIB portion subscribed 1.12 times, HNI 2.15 times and retail 2.95 times. The other issue during the week which was the first of its kind 'REIT', Real Estate Investment Trust from Embassy Office Parks was subscribed 2.58 times with Institutional portion subscribed 2.15 times and non-institutional portion subscribed 3.10 times.

The government has crossed their divestment target of R 80,000 crore and received over R 85,000 crore. This is the second year in a row when the target has been reached. The CPSE ETF has received record subscription and the same was oversubscribed many times over. The government has a green shoe option and final figure would be known only on Monday.

Big lead
In the coming week March futures expires on Thursday, March 28. The current value of NIFTY implies a series gain of 664.60 points or 6.16 per cent. The lead that bulls have is too big for the bears to make any serious challenge to them. There would however be some more softening in the market before the series expires in four days. A point to be noted is that the financial year ends in this week with the last day of trade for the equity segment being Wednesday March 27 and derivatives being expiry day.

It would therefore be appropriate that the market trades softer in the initial part of the week and then picks up momentum. The strategy for the week would be to buy into the dips that are likely when trading resumes and gains momentum as we get closer to expiry. The market continues to be trending in the direction of making a new life time high in the early part of April 2019.

Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd. 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.

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