The week ahead will continue to see sharp two-sided moves in both directions. The week gone by was one of consolidation where markets tried to digest sharp gains of 12th June and make a base for themselves. By and large, it appears that objective has been fulfilled. Markets gained on two of the five trading sessions and lost on three. BSESENSEX lost 270.07 points or 0.33% to close at 81,451.01 points while Nifty lost 102.45 points or 0.41% to close at 24,750.70 points. BANK NIFTY was up 351.45 points or 0.63% to close at 55,749.7 points. The broader markets saw BSE100, BSE200 and BSE500 lose 0.34%, 0.24% and 0.00% (flat with net change of 1.73 points). BSEMIDCAP gained 0.61% while BSESMALLCAP gained 1.73%.
The Indian Rupee lost 36 paisa or 0.42% to close at Rs 85.57 to the US Dollar. Dow Jones lost on one of the four trading sessions and gained on three. It was up 667 points or 1.60% to close at 42,270.07 points.
Results season for the quarter and the year ended March 25 is over and final summary would be available during the course of the week. It appears that the results were by and large on expected lines with profits for India Inc improving. Valuations which have been a concern for Indian markets, have not increased post the results, but have been contained. Once the summary is out, there would be clarity.
May futures expired on Thursday the 29th of May. There was a sharp upside movement in the last one hour and particularly in the half hour from 3pm to 3.30pm to get a better weighted average close for settlement of NIFTY. Despite the heroics, during the week, NIFTY was flattish. It closed with series gains of 586.90 points or 2.42% to close at 24,833.60 points.
In economic news, GST collection for May 25 was at Rs 2.01 lakh crores, which was higher by 16.4% over May24 but lower than the record 2.37 lakh crores in April 25. Taking the first two months as an indication, the government would be eyeing a total collection of Rs 25-27 lakh crores from the current year.
The primary markets have become super active and the last week saw four issues open and close. The first was from Schloss Bangalore Limited which had tapped the markets for its Rs 3,500 crores combined issue. The issue was overall subscribed 4.74 times with QIB portion subscribed 7.86, HNI 1.08 and Retail 0.87 times. The price band was Rs 413-435.
The second issue was from Aegis Vopack Terminals Limited which was a Rs 2,800 crore issue. The overall subscription was 2.2 times with QIB 3.47 times, HNI 0.59 times and Retail 0.81
The third issue was from ProstarM Infosystems Limited which had tapped the markets with its issue of about Rs 160 crores. The issue was well received and was oversubscribed 97.2 times with QIB portion subscribed 104.49 times, HNI portion subscribed 222.14 times and Retail portion subscribed 39.49 times.
The fourth issue was from Scoda Tubes Limited which was an issue for Rs 220 crores and was oversubscribed 57.92 times overall with QIB portion subscribed 74.85 times, HNI portion subscribed 121.73 times and Retail portion subscribed 20.91 times.
The first two issues would be listing on Monday followed by ProstarM on Tuesday and ending with Scoda Tubes on Wednesday. Many more IPOs are expected in the weeks to come.
It is expected that the issues from Schloss Bangalore and Aegis Vopack would have muted listings looking at the response while those from ProstarM and Scoda would do well.
RBI meets for its bi-monthly policy review meeting between the 4th and 6th June. Looking at positive GDP numbers, above average forecast of rains from the Met department, and inflation within expected range of RBI, another rate cut of 50 basis points is likely to happen.
Expect markets to take all these events into their stride. News on the Trump tariff front are not all that good as Trump has doubled tariff on steel and aluminum to 50%. The India-US tariff negotiations are at an advanced stage of discussion and that could be a big trigger for markets as and when announced.
Markets need to decisively cross and sustain 25,150-25,200 points for the next leg of the rally to unfold. Until that happens, these levels would be a strong resistance. On the support side, levels of 24,400-24,500 and if this were to break lower down at levels of 23,800-23,850 points would be key. Currently until either of the levels are violated, it would be a trading zone in the market with sharp intra-day swings.
Eventful week ahead and let’s await the outcome.
