Gaining lost ground

Truncated week sees sharp reversal with Sensex closing positive

The week was truncated on account of holidays for Holi and Good Friday. A sharp reversal helped the markets recover lost ground on Thursday and in the process the BSE SENSEX closed positive for the week gaining 100.17 points or 0.53 per cent to close at 18,835.77 points.

Prime Minister Manmohan Singh has his headphones adjusted by an aid as he attends the BRICS summit in Durban. Leaders from the BRICS group of emerging powers failed to launch a much-anticipated new development bank to rival Western-dominated institutions like the World Bank. Pics/AFP

The NIFTY gained 31.20 points or 0.55 per cent to close at 5,682.55 points. The broader market saw the BSE100, BSE200 and BSE500 gaining 0.65 per cent, 0.72 per cent and 0.76 per cent respectively. The BSE MIDCAP and BSE SMALLCAP gained 1.02 per cent while the smallcap gained 0.55 per cent.

Gainers
The BSE CON was the top gainer up 3.95 per cent. Other gainers included BSE PSU up 1.63 per cent, BSE METAL up 1.54 per cent and BSE IT up 1.44 per cent. The losers were led by BSE AUTO down 1.20 per cent. The other losers were BSE CAP down 1.16 per cent and BSE OIL down 1.14. In individual stocks, Tata Communications was the top gainer up 9.89 per cent followed by JSW Steel up 8.48 per cent, Titan up 5.73 per cent and ONGC up 5.31 per cent. On the losing side, were National Aluminium down 8.55 per cent, Hero Motocop down 6.88 per cent and Reliance Industries down 4.56 per cent.

A woman gives money to musicians in a street in the old part of the Cypriot capital Nicosia. Businesses and families in Cyprus are suffering despite the return to normal banking hours, as draconian capital controls make it hard to pay salaries and bills, trade groups said

Numbers
Data about the CAD (current account deficit), which came after the market closed showed that the same was 6.7 per cent for the quarter, ended December 2012. This number was way above the level expected by people and there is every possibility that markets would weaken when they open today. The fiscal deficit at the end of February 2012 is 97.4 per cent of the budgeted deficit and gives rise to a hope that would be contained in the 5.24 per cent budgeted for the current year, which ended yesterday.

Best
FIIs were buyers of roughly Rs 2,000 crore in the short week while domestic institutions sold shares worth Rs 550 crore. In the month of March, FII inflows were Rs 11,000 crore which were half of what came in January and February 2013. Total inflows in the first three months have been roughly Rs 55,000 crore or 10 billion US dollars, probably the best ever. Domestic institutions sold Rs 2,000 crore in March and Rs 8,000 crore in the three months ending March 2013.

Politics
The political atmosphere has become troublesome with the government straining to keep the outside support on which basis it has its numbers in Parliament intact. To make matters worse, with the economy not showing positive signs of improvement, the stock markets are not enthused. The one driver on which we seem to be still sustaining and depending is the FII inflows. The cautionary signal but not yet alarming is the fact that their investments in March 2013 have become half of what they were in January and February. As long as March is an aberration and the inflows move back to the 3-4 billion dollars a month things would be fine. Otherwise there could be deeper issues.

Issue
Divestment by the government is becoming a concern as in issue after issue even though it is bailed out by LIC; the stock price seems to fall unabated. Just two weeks ago, NALCO or National Aluminium was sold by the government at a floor price of Rs 40. The issue was subscribed roughly 71 per cent by LIC. In a mere eight trading sessions thereafter, the stock has lost a further Rs 6.85 or 17.13 per cent, to close at Rs 33.15. If in a market which is already devoid of interest from virtually all categories of investors this kind of fall in PSU shares happens the little interest in the market will also vanish. It's high time the government thought of changes in their divestment system and strategy.

Fool
The week ahead sees the listing of PSU Company Repco Home Finance Limited on April 1, also known as 'All Fools Day'. One is not sure who would become the fool in this issue, which saw poor response from the HNI's and retail investors. The issue was priced at the upper end of the price band of Rs 165-172. This issue listing would give an indication of who got it right whether it was the smart QIB's or the really smart HNI and Retail. Key levels for the SENSEX are 18,600 and 19,000 while similar levels for the NIFTY are 5,600 and 5,750 respectively.

The BSE SENSEX has support at 18,760 points, then at 18,641 points, then at 18,535 points and finally at 18,327 points. It has resistance at 18,956 points, then at 19,044 points, then at 19,179 points and finally at 19,378 points. The NSE NIFTY has support at 5,631 points, then at 5,601 points, then at 5,539 points and finally at 5,505 points. It has resistance at 5,715 points, then at 5,748 points, then at 5,803 points and finally at 5,845 points.

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

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 risk.

Financial Philosophy
Quips and quotes as a new financial year dawns, because money can’t buy you love but does warrant a few laughs

It is a kind of spiritual snobbery that makes people think they can be happy without money.
- Albert Camus

Inflation is taxation without legislation.
- Milton Friedman

The safe way to double your money is to fold it over once and put it in your pocket.
- Frank Hubbard

There is a very easy way to return from a casino with a small fortune: go there with a large one.
- Jack Yelton

I am opposed to millionaires, but it would be dangerous to offer me the position.
- Mark Twain

There’s no money in poetry, but then there’s no poetry in money, either.
- Robert Graves

Carsickness is the feeling you get when the monthly payment is due.
- Author Unknown

If you think nobody cares if you’re alive, try missing a couple of car payments.
- Earl Wilson

There are a handful of people whom money won’t spoil, and we count ourselves among them.
- Mignon McLaughlin

Money can’t buy happiness, but it can buy you the kind of misery you prefer.
- Author Unknown

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