Light is going right

Prime Minister Narendra Modi, BJP President Amit Shah, Finance Minister Arun Jaitley and BJP senior leader LK Advani during the BJP National Executive Meeting, in New Delhi. Pic/PTI

The week gone by saw markets opening on a weak note and unlike previous weeks, saw a sharp fall on the first trading day of the week. They fell on the first three trading days and then gained but failed to close the week with gains. BSESENSEX lost 233.25 points or 0.66 per cent to close at 38,389.82 points. NIFTY lost 91.40 points or 0.79 per cent to close at 11,589.10 points. The broader indices saw the BSE100, BSE200 and BSE500 lose 1.03 per cent, 1.13 per cent and 1.19 per cent respectively.

Taking stock
The top sectoral gainer was BSEHEALTHCARE up 2.24 per cent followed by BSEMETAL 1.60 per cent and BSEIT 1.47 per cent. The top loser was BSEFMCG 4.81 per cent followed by BSECON DUR 3.97 per cent and BSEREALTY 3.15 per cent. In individual stocks, the top gainer was Aurobindo Pharma up 11.11 per cent followed by Wipro 6.91 per cent and Bajaj Auto 6.08 per cent. The top loser was Hindustan Unilever down 8.66 per cent followed by Zee Entertainment 6.25 per cent, Ambuja Cement 6.20 per cent and Yes Bank 6.17 per cent.

An undercurrent
The Indian Rupee continued to be under pressure and was down 74 paisa or 1.03 per cent to close at Rs 71.73 Dow Jones lost 48.28 points or 0.19 per cent to close at 25916.54 points.

August futures expired on Thursday, August 30 at 11,536.90 points. They gained 369.60 points or 3.20 per cent. Crude prices are hovering between 77-78 dollars and with a depreciating rupee, prices of petroleum products are at an all time high. India is in a catch 22 situation and the Iran ban on imports as part of sanctions becomes a triple whammy for us. While talks are on no one really knows about the outcome.

SEBI has given some relief to funds managed by Indian Fund managers of HNIs and people of Indian origin. Markets had been badly hit on this ground when trading began on Monday. With clarity on the same emerging, there would be a strong undercurrent in the marketplace in coming days.

Volatile moves
The week ahead would see markets move in a volatile manner and try to make new highs as well. We are 600 points away from a new high on the BSESENSEX and 171 points in the case of NIFTY. The lows of the previous week were 696 points lower on the BSESENSEX and 196 points on the NIFTY. It could be therefore said that we are midway from the low of last week and a new high.

Primary markets are becoming active again and the government kicked of its roadshow of Ircon International Limited, which is a railway ministry issue and will be opening on Monday September 17. More about this issue next week. Some more issues are expected in the week ahead and a couple of companies would have their road shows.

Stay light
Market sentiment seems to be improving and they are more hopeful of a recovery today, than they were same time last week. The strategy would be to continue to remain light in the market and use sharp dips to buy, and strong rallies to sell into in the market. With the market rally unlikely to end anytime very soon, it would provide opportunities to make trading gains in the volatile times that we are witnessing.

With SEBI giving relief to fund managers handling portfolios of HNIs and PIOs, we should see an upbeat market. There is a holiday on Thursday because of Ganesh Chaturthi. Trade cautiously.

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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