Markets have been choppy and are giving signs of becoming nervous. The last week saw a sharp selloff on the first two days with the market losing 245 on Monday and 345 points on Tuesday before a rally happened on Wednesday which saw markets recover 139 points. Thursday they went crazy and rallied a strong 481 points led by short covering and also positive announcements. Friday was a fairly quiet day with nothing much happening. On a weekly basis the markets gained 620 points and lost 591 points on three days to end the week with a miniscule gain of a mere 29 points on a base of 27,000 points. FII’s also turned neutral and there net buying was less than 100 crs.
The key event net week is expiry of September futures which happens on Thursday the 25th. The current NIFTY is higher by 167 points or 2.1%. The comfort factor of bulls is not very high this time but they need to fend off for the next four days to see the month through.
Alibaba created history and raised a staggering 21.8 billion dollar. The share issued at 68% a piece gained 38% on listing day and is now valued at a massive 232 billion dollars.
Shemaroo completed its IPO and was oversubscribed over 7 times. Shares of Sharda Cropchem will list on Tuesday the 23rd of September. The share which was issued at Rs 156 was oversubscribed over 60 times. The grey market premium indicates that the share would list at a price of around Rs 240-245. The lucky investors in this issue would be making a killing in this issue and this would augur well for further IPO’s going forward.
It is widely believed that the first divestment from the government is likely to open this week. With three issues cleared in the form of SAIL, NHPC and ONGC already in place the government needs to only take a call which one would happen first. The first issue most likely to happen would be SAIL.
Prime Minister Narendra Modi negotiated a deal of 35 billion with Japan, 20 billion with China and commercial use of uranium with Australia would this weekend embark on his maiden visit to the USA. It is widely expected that the deal with USA would be far bigger than what has been done so far. It would be more interesting to see how many defence deals involving technology transfer are signed and what the official US stand on the same is. In terms of individual companies I would like to keep my eyes focused on Bharat Electronics.
The markets are crucially poised but are certainly looking tired. One needs to be more than cautious and though the US visit is keenly awaited the market may already have run ahead of time. Keep a close look on development and if the market fails to break out there could be short term pain.
Trade cautiously but look to invest in dips.
