It was a tough week for the markets and what one saw was red all over the street. One had to struggle to see some green. The unfortunate part is that it has come on the eve of Diwali. There would however be hope that things would improve post Diwali which takes place during the current week. BSESENSEX lost 1,822.46 points or 2.24% to close at 79,402.29 points while NIFTY lost 673.25 points 2.71% to close at 24,180.80 points. The broader markets saw BSE100, BSE200 and BSE500 experience greater degree of pain and lose 3.15%, 3.53% and 3.98%. BSEMIDCAP lost 5.20% while BSESMALLCAP was down a massive 7.37%. Markets lost on all five trading sessions. This would put pressure on markets going forward as retail investors have the bulk of their investments in the small and midcap space. 

We had a large number of investors coming to the markets post the onset of Covid-19 in March 2020 when markets had hit a rock bottom of 25,638 points on BSESENSEX and 7,511 points on NIFTY during the month of March. In February 2020, the indices were at around 40,000 and 11,200 points respectively. Since then, it has been more or less a secular uptrend over the last four and a half years and the investor base which more than trebled since this period, enjoying what could be termed as a dream run. This is probably for the first time since this period began that we have a benchmark index down so sharply. NIFTY for the current month of October is down 2,035.25 points or 7.76% for the series so far. Global cues are not the best and we would have a new President in the USA in a week’s time with the race being too close to call. Results for the July-September quarter are certainly not the best and we seem to be under pressure on that count. 

There were no sectoral gainers in the last week and the one to fall the least was BSEIT, which was down 1.57%. The one to fall the most was BSEOIL&GAS which was down 7.34%. The primary markets have suddenly seen a sharp jump in issues coming and one is getting an uncanny feeling that merchant bankers and promoters are trying to push through their issues before the markets take any further beating. This comes on top of the Rs 1,00,242 crores sales so far in the month of October by FIIs which has been very well matched by the SIP fed domestic institutions who have invested almost an equal 97,090 crores so far. 

The Indian rupee lost 2 paisa or 0.02% to close at Rs 84.08 to the US Dollar. Dow Jones had a poor week and lost on all five trading sessions. Dow lost 1,161.51 points or 2.68% to close at 42,114.40 points. 

In primary markets we saw the listing of Hyundai Motor India Limited on Tuesday the 19th of October. The listing was tepid on expected lines. Against the issue price of Rs 1,960, the discovered price was Rs 1,931, a loss of Rs 29. It made a low of Rs 1,807.05 and closed at Rs 1,820.40, a loss of Rs 139.60 or 7.12%. By the end of the week, the share had recovered some lost ground and closed at Rs 1,843.85, a loss of Rs 116.35 or 5.93%. 

We had a bumper subscription to the issue of Waaree Energies Limited which was subscribed 79.44 times. There was record subscription in terms of number of applications which hit 97.34 lakhs. The issue which was priced at Rs 1,503 would list on Monday the 28th of October. 

The issue from Afcons Infrastructure Limited is open and would close on Tuesday the 29th of October. 

Coming to the markets in the week ahead, we have October futures expiring on Thursday the 31st of October. The present value of NIFTY at 24,180.80 points is down 2,035.25 points or 7.76% compared to the series opening at 26,216.05 points. At best, the bulls may pull back some points, but the series is lost by a long way. 

Geo political news flow is not the best and we could see a measured escalation of the Israel-Iran conflict. Hopefully the election of the new US President by the 4th/5th of November could bring about some thawing of relations, but not sure. As mentioned earlier, the results emerging are not what one hoped for and they could be termed as disappointing. In such a scenario to expect any sharp recovery in the markets would be unlikely. 

Markets made a low at 79,137.98 points on BSESENSEX and at 24,073.90 points on NIFTY on Friday. Support exists at levels around these and slightly lower at around 78,300 on BSESENSEX. This was the low made in August 2024. On NIFTY, we have support at 23,900 levels which is the low of August at the same time. There could be a bounce in the short term from around these levels, but I believe this would be only a technical bounce. The pain in the market would continue and for some time, it would be a “Sell on Rally” situation. Diwali Muhurat trading would take place on Friday the 1st of November, which means the week would be effectively of four days with just an hour’s trading on Friday which is more symbolic in nature. Muhurat trading time is 6pm to 7pm. 

The strategy for the week ahead would be to sell on rally and look at select buying on large dips, but only in the large cap stocks. Pain would continue in the mid and small cap space for some more time as new investors who have joined over the last 50-54 months experience what ‘Mandi’ means. 

Trade cautiously.

Wishing all a Happy and Prosperous Diwali and New Year (SAMVAT 2081)