Sanctions on account of Crimea which were imposed on individuals had virtually no effect on markets. Indian markets remained fairly quiet and the benchmark indices were virtually flat closing with minor losses. The Midcap and Smallcap indices gained 2 and 3% showing that the rally was widespread and not truly reflected in the movement of benchmark indices.
The week sees expiry of March futures and at the current closing the NIFTY is up a hefty 256 points or 4.1%. The currency is stronger and closed below the 61 level. Election news is at the forefront and one finds that intellectuals from the minority community have also joined the BJP. This augurs well for the country as the 67 year old nation needs to get out of this so called secular non secular and communal and non- communal mind-set if it has to progress. The antics of the AAP party leader are nothing short of those of a spoilt child. Very clearly his entire ploy is to remaining in the news at any cost. After shouting from the roof top that he would contest from Varanasi and that he would do a referendum of sorts to get the peoples feel, he has now decided that he would just contest without getting the referendum. I am sure that this is not the end of this drama and many more events will unfold before the last day of withdrawal of nominations.
The party seems to be losing popular support from it’s hey days as one finds that all people who have been denied party tickets and wish to contest on AAP are more than welcome. There is virtually no due diligence being done and the current objective is to get maximum candidates to contest on the part ticket. It sure would be interesting to see of the 543 seats, on how many seats do AAP finally get candidates to contest.
Coming to the markets, there is remarkable resilience in them. Though there were minor corrections, they are comfortably holding well above the 21,500 and 6,350 levels on the SENSEX and NIFTY respectively. The levels from which the market broke out in December 2013 post state election results have held steady. The fact that the markets have spent more about four months makes one believe that these are important support levels.
FII’s have been bullish for a few months and they have been buying quite steadily. In this week they bought the 9% stake sale in Axis Bank by SUUTI and helped raise Rs 5,500 crs. The bulk of this was purchased by FII’s and on the Indian side LIC was a big buyer. Including Axis Bank purchases, FII’s bought Rs 7,500 crs of equity in the week. Domestic institutions were sellers of about Rs 4,400 crs again including Axis Bank which alone would be worth more at Rs 5,500 crs. The ETF of 10 PSU stocks launched by the government were oversubscribed and received bids for about Rs 4,000 crs against the target of Rs 3,000 crs. The fund received excellent response from FII’s and allotment of this scheme will happen next week but most likely on Friday the 28th of March. This will help the government take credit of this in the current financial year.
The week ahead sees the month of March and the year 2013-14 almost expiring with trading for just one day left in 31st March. The financial year for purposes of income tax would expire with futures expiry as trading thereafter would not be settled in the current year. With NAV propping likely we could see further movement in Midcap and Smallcap stocks in the coming week. With retail yet to participate in any meaningful manner this movement augurs well as retail would at least be able to sell some of their holding purchased earlier and make some profit. If this trend continues there couls=d be some retail participation happening as elections get closer.
The coming week would see new highs on the back of FII purchases and some short squeeze by bulls that have the market under control having made gains of over 4% compared to the previous month’s expiry.
