Diwali festivities have come to the market in anticipation of Diwali which happens on the following Monday. Markets gained on all five trading days of the week gone by with stellar gains on the first two days and then struggling to gain but still closing with positive gains at the end of the day.
BSESENSEX gained 1,387.18 points or 2.39 per cent to close at 59,307.15 points while NIFTY gained 390.60 points or 2.27 per cent to close at 17,576.30 points. The broader markets saw BSE100, BSE200 and BSE500 gain 2.09 per cent, 2 per cent and 1.82 per cent respectively. BSEMIDCAP was up 0.39 per cent while BSESMALLCAP was up 0.15 per cent.
The Indian Rupee lost 33 paisa or 0.40 per cent to close at Rs 82.68 to the US dollar. Dow Jones had a great week and it appears all concerns about inflation and interest rates are behind them currently. Dow gained on the first two days of the week, lost small amounts on the next two days and ended the week with spectacular gains on Friday. For the week, Dow gained 1,447.73 points or 4.89 per cent to close at 31,082.56 points. For the records, from the lows, Dow has gained roughly 2,400 points in six trading sessions.
Markets saw decent results from the heavyweights ITC and Hindustan Lever. The banking sector was the start performer and the BSEBANKEX gained 4.18 per cent during the week. Results from ICICI Bank, Axis Bank and Kotak Bank helped in the big rise. Reliance Industries profit for the second quarter was flat as compared in the quarter, a year ago.
The previous week saw retail investors selling midcap and Smallcap stocks. This was of their holdings that they had built up over the last couple of months. They seem to be averse to the rise in the values of the market and probably believe that the same may not be sustainable. This kept the midcap and Smallcap indices under check and also an underperformer to the benchmark indices.
While the new norms for subscription regarding banking of applications have been very successful, we have now seen a new trend emerging which needs to be nipped in the bud. Investors applying in the HNI category for IPOs on the last day seeing the level of subscription and having a change of mind or heart, make another application in the retail category.
While making two applications in the same PAN is not permitted, the registrar simply cancels both applications and the investor gets an exit which he wanted. To curb this practice which would become a menace going forward, registrars should be told to add the retail application to the HNI application and the same be treated as one. The investor in any case has made two applications. This would ensure that in future he does not try to beat the system. This is very important and needs to be looked into on an urgent basis as the situation could become serious going forward. All malpractices replicate very fast.
There were two issues which were listed last week and they had a decent showing. The first was Electronics Mart India Limited which had issued shares at Rs 59. The shares closed on listing day at Rs 84.45. During the week they rose further to touch a high of Rs 102.10, before profit taking saw the share surrender some of its gains and close at Rs 87.70, a gain of Rs 28.70 or 48.64 per cent.
The second share to list was from Tracxn Technologies Limited which had issued shares at Rs 80. On debut day the share closed at Rs 93.35. On Friday, it made a high of Rs 102.65, but closed lower than the previous day at Rs 91.35. The weekly gain was Rs 11.35 or 14.19 per cent.
Shares of Delhivery, a company which had listed in May 22, had a disastrous performance over the last two days. The company announced on Thursday what could be termed as advance performance indicators. These indicated that the growth that was being talked about would not happen. Post this announcement, over two days the share price fell from Rs 560.35 to Rs 386.55, a loss of Rs 173.80 or 31 per cent. This is its lowest close while intraday the share had touched Rs 377.05. Something seems wrong with the way some of these new age companies perform and the market perception and expectation from them.
The week ahead sees trading for the new Samvat 2078 being held on Monday in a special Muhurat session for 1 hour from 6.15 p.m. to 7.15 p.m. Markets would also remain closed on Wednesday. This leaves just 1 day and 1 hour before October futures expire on Thursday. Currently the October futures series has seen bulls enjoy the lead that they currently have. The series is up 758.20 points or 4.51 per cent at 17,576.30 points. With a strong showing that Dow had on Friday, it appears that bulls will build on the current lead that they have in the series.
Expect a gap up open in the Muhurat session and typical of such sessions, low volumes would be the order of the day. Tuesday would see people squaring up or rolling their positions to November series as Thursday could be very volatile. Tuesday should experience decent volumes.
The market has very strong support in the region of 17,350-17,450 on NIFTY and 58,650-58,950 on BSESENSEX. This takes care of the previous top and also some more cushion on the downside. On the upside we have resistance around the 17,850-17,900 on NIFTY and 60,125-60,300 on BSESENSEX. Assuming this does get crossed in the three days plus one hour during the week ahead, the resistance is at 18,100 and 61,000 levels.
The festive mood is here just in time for Diwali. Enjoy the atmosphere and the festivities even in the marketplace. India seems better placed than many of its peers. While we will continue to be guided by overseas cues, our outperformance will continue.
Wishing all readers Happy Diwali and a prosperous Samvat 2078.
(Arun Kejriwal is the founder of Kejriwal Research and Investment Services. The views expressed are personal)