Here comes Cheer

The markets suffered a sharp setback last Monday after the Supreme Court passed strictures on coal allocation since 1995. The full verdict is expected today, when greater clarity on the subject would be available. Even though the setback was there it did not prevent the markets from closing at yet another high.

Prime Minister Narendra Modi (L) waves alongside his Japanese counterpart Shinzo Abe (2nd R) during a visit to Toji Temple in Kyoto, western Japan. Pic/AFP

The BSESENSEX gained 218.56 points or 0.83 per cent to close at 26,638.11 points while the Nifty gained 41.15 points or 0.52 per cent to close at 7,954.35 points. The broader indices saw the BSE100, BSE200 and BSE500 gain 0.17 per cent, 0.20 per cent and 0.14 per cent, respectively. The BSEMIDCAP lost 0.45 per cent while the BSESMALLCAP lost 0.33 per cent.

In sectoral gainers, the top gainer was BSEFMCG up 3.24 per cent followed by BSEAUTO 1.52 per cent and BSEIT 1.38 per cent. The losers were led by BSEREALTY down 5.21 per cent, BSEMETAL down 4.69 per cent and BSEPOWER down 3.05 per cent. In individual stocks, the gainers were led by Lupin up 12.47 per cent followed by BHEL up 5.80 per cent and Hind Unilever up 5.26 per cent.

The losers were led by Jindal Steel down 20.33 per cent after the Supreme Court order. Readers would recall that this company is owned by ex-MP of the Congress party Naveen Jindal who is in the thick of controversy regarding allocation of coal and iron ore mines. Other losers included DLF down 8.80 per cent. PFC or power finance down 7.24 per cent and Tata Power down 7.11 per cent. Bhushan Steel continued to move from on down circuit to another and closed at Rs 101.35 down 18.5 per cent for the week.

Significant gains
There was plenty of action during the week which began with the Supreme Court directive on coal blocks. Financial Technologies sold its last block of shares in MCX to SBI Life and has no more interest in MCX. The chapter of its association with MCX is now over and the matter would be confined to courts, Financial Technologies and NSEL (National Spot Exchange).

The IPO from Snowman Logistics Limited was subscribed handsomely with the issue subscribed overall 60 times. There will be a lottery in the retail bucket with one successful applicant getting 300 shares from amongst 18 applicants. The level of oversubscription will ensure decent returns for successful applicants.

August series expired at a level of 7,954.35 points, a gain of 233.05 points or 3.02 per cent over the July expiry. This is the seventh consecutive month of gain. Also, over a year the Sensex has gained 43 per cent while the Nifty has gained 45.38 per cent. The gains are significant and any further gains from these levels would have to be driven by fundamentals and better performance of the economy and corporate India.

Dow Jones closed at 17,098.35 points, a weekly gain of 97.23 points or 0.57 per cent. FIIs continued to be buyers and bought equity worth Rs 634 for the week and Rs 6,230 crore for August. Domestic institutions bought shares worth Rs 2,062 crore for the week and Rs 6,577 crore for the month. The Indian rupee gained further and closed at R 60.50 a weekly gain of Rs 0.26 paisa.

A record
Narendra Modi launched the Jan Dhan Yojana, India's largest financial inclusion scheme and over 1.5 crore accounts were opened on the first day. This is a record not only in India but also in the world, and deserves kudos for the greatest effort made towards financial inclusion.

In what would be great news for the government and the economy, the GDP for the quarter ended June 2014 moved up to 5.7 per cent which is the best level ever in the last nine quarters. The former FM was quick to jump and take credit for the same and highlight the growth. Irrespective of who deserves credit it sure is one more sign that the worst is behind us and there is optimism amongst the people of the country.

The Indian Prime Minister is on a tour of Japan and it appears that a few trade agreements would be signed on this tour. Japan has been a keen trading partner with India and former Chief Minister NaMo, has had great relationship with Japan as Gujarat CM. He is expected to take this relationship forward now as PM. Varanasi is to be developed as a smart city with the help of Japan and this would be a great thing for the ancient and holy city.

This week, would see markets opening with a bang on the back of GDP numbers which were declared late on Friday evening which was a trading holiday. The court verdict on the coal block allocation will certainly bring clarity on the issue and give direction to the existing miners and users of coal. Expect the Nifty to make new highs and cross the psychological level of 8K and 27K on the Sensex.

Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd. Readers are invited to read more about these and other issues on his website https://ak57.in

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