Monday magic fails – ITC tanking is talk of the week

Mondays seem to be a special day in July for the markets. In the first two weeks markets gained a percent each while in the third it was flat and drama happened on Tuesday when ITC was at the hammering end. The stock lost a massive Rs 37.20 intraday and made a low of Rs 276.90 before recovering. It closed the week at Rs 288.50 down Rs 48.70 or 14.40%. What is really surprising and worth taking note of is that over 9 cr shares changed hands physically or were actually delivered on Tuesday. This makes the value of transaction at Rs 2,500 crs and no names appeared on either the buy side or the sell side. It sure is a big number and very clearly there was huge interest in the stock.

The Reliance AGM was held on Friday and in characteristic fashion the company declared a surprise one for one bonus issue to coincide with its 40th anniversary. It also launched its 4G smart phone which would be available against a security deposit for three years and come absolutely free. The company which also declared impressive results for the June quarter saw its share price gain Rs 55 or3.59% and close at Rs 1,586. This incidentally is a nine year high and helped the market gain from the ITC factor.

The numbers from Wipro were better than what the street expected and the buyback at a substantially higher than market price saw the share register double digit gains. With the broader markets looking very expensive, and IT stocks having done nothing in the last couple of quarters there is a sense of security creeping in the IT sector. Investors are taking the view that with markets set to correct, there is a strong possibility that IT stocks may hold themselves, effectively outperforming the broader market.

Expiry of July series happens during the week ahead and the current level of NIFTY futures is higher by 411.15 points or 4.33% compared to the June expiry. The current level of NIFTY is at 9,915.25 points. The current position is in favour of bulls and they need to continue to press home the advantage otherwise they could be under pressure.

The new President of India has been elected and he would be sworn in on Tuesday the 25th of July. Shri Ram Nath Kovind would be the 14th President of India and the first from the NDA. Shri Abdul Kalam was elected during the NDA term but was not a member of the NDA or BJP.

Markets in the coming week would be volatile with expiry to happen. Currently bulls have the upper hand but it doesn’t take too long for things to change. We need big surprises on the positive side from ongoing quarterly results to keep the momentum going. Stay light and use sharp movements to trade the market.

Magical Monday – Will it deliver for bulls third time?

Monday seems to be a magical day for the markets and a new term Magical Monday Market would seem apt what happened during the last week.
Markets gained a percent on Monday and once again set the momentum for the week in which BSESENSEX hit the 32k mark and gained 660.12 points or 2.10% to close at 32,020.75 points. NIFTY gained 220.55 points or 2.28% to close at 9,886.35 points. This was the second consecutive week in July when we saw this happening on Monday and the week having a good show. Nifty is up 4.02% since the beginning of the series.

Friday was a different kind of day and it appeared that the recently listed shares were under severe pressure. Whether it was AU Small Finance Bank or a CDSL or HUDCO. The shares saw higher volumes, significantly higher delivery volumes and lower prices. This is not to suggest that markets have peaked out but just that it is an indication.

Valuations are extremely high and there is no doubt about the same. The biggest driver continues to be liquidity and one needs to be wary of the same at these higher valuations. Be cautious is the buzz word.

NSE is in the news for the right and wrong reasons. On Monday it was disaster day when there systems came on only after the fourth attempt at 12.30pm and took about an hour to stabilise. Today the 17th of July would see their MD and CEO Vikram Limaye finally joining the board. Thirdly from the coming week NSE would introduce trading in 15 foreign stocks and three currencies.

Markets are crucially poised and dangerously too. It is better to be late than never. Take some profits of the table and allow markets to cool. Don’t be greedy and short the markets because bulls feed on bears and their shorts.

GTPL Hathway Limited – Completes Anchor Allocation

GTPL Hathway Limited which is tapping the capital markets with its simultaneous offer completed allocation to anchor investors. The issuew consists of a fresh issue to raise Rs 240 crs and an offer for sale of 1.44 cr shares in a price band of Rs 167-170. The company allotted shares to 6 anchor investors comprising of 11 entities. Two domestic funds were allotted 32.32% of the anchor allotment of 85,55,294 shares.

The issue is overtly prices as the results for the year ended March 2016 and nine months ended December 2016 show a huge difference between IND(AS) and Indian GAAP. One is unable to reconcile the same even from the document.

The full list of anchor allotment and the entities is given below: –

Subscribe to RSS Feed Follow me on Twitter!