Markets began the week on expected lines and were going along merrily until Friday hit them. Tata Motors provided notional impairment on their investments into JLR and the company reported a loss of Rs 27,000 crs. Markets were badly affected and lost substantial ground yet managed to remain positive. They however gave up the gains of the previous four days. BSESENSEX gained 77.05 points or 0.21% at 36,546.48 points. NIFTY was up 49.95 points or 0.46% at 10,943.60 points.
Dow Jones gained 42.44 points or 0.17% to close at 25,106.33 points. Donald Trump is also battling several issues simultaneously. Firstly the China-US trade wars seem to be making no progress. Secondly the Mexican wall seems to be stuck between the Democrats and the Republicans and thirdly it appears that Trumps businesses are under investigation.
RBI reduced repo rates unexpectedly by 25 basis points to 6.25%. This rate cut is after 17 months. It also changed its stance to neutral from calibrated tightening, indicating that they are comfortable with the current level of inflation and do not expect the same to rise in the near term.
The market mood continues to remain bearish and yet they end with weekly gains. This can be borne out from the fact that with even an unexpected rate cut from RBI, markets could not hold on to the intra day gains and ended virtually flat on Thursday.
Every week the market comes up with some stock or the other which has bad news and the stock gets butchered and hammered mercilessly. Last week it was the ADAG stocks and of course Tata Motors on Friday which lost 30.45 or 16.75% to close at Rs 151.30. Readers would recall that in previous weeks it was Sun Pharma, Zee, DHFL and many others. Probably it is this opportunity which is making market minds bearish. Food for thought.
There were two listings last week. The first was Xelpmoc Technology and Design Limited which had raised Rs 23 crs at Rs 66. Shares listed weak and gained thereafter to close at Rs 71.30, a gain of Rs 5.30 or 8.03%. The other issue was from Chalet Hotels Limited which had raised Rs 950 crs through a fresh issue and an offer for sale of 2.4685 cr shares at Rs 280. The share listed on Thursday and closed at Rs 292.15, a gain of Rs 12.15 or 4.34%.
Elections are likely to be notified around the 5th to the 10th of March. The pending bills passed by Lok Sabha and pending in Rajya Sabha are likely to be proclaimed as ordinances. This would set the pace for a no holds barred election. The kind of noise that has already begun about the elections gives a feeling it would be a fight to the finish with no quarter given or asked for.
Scepticism and pessimism are the best two words to describe the state of the market. It makes sense to stick to the strategy of the previous weeks and use sharp dips to buy and rallies to sell.
