The week gone by saw a mixed market with some stocks and sectors behaving as if we were on two different planets. BSESENSEX lost 953.70 points or 1.14% to close at 82,626.70 points while NIFTY lost 222.60 points or 0.87% to close at 60,186.65 points. BANKNIFTY gained 66.10 points or 0.11% to close at 60,186.65 points. The broader markets saw BSE100, BSE200 and BSE500 lose 0.78%, 0.67% and 0.54% respectively. BSEMIDCAP gained 1.25% while BSESMALLCAP was up 2.43%. The top gainer was BSEAUTO which was up 2.29% while the top loser was BSEIT which was down 8.04%. BSESENSEX gained on two of the five trading sessions and lost on three, while NIFTY gained on three and lost on two. The highs that the two indices made were at 84,487.34 points and 26,009.40 points. 

The Indian Rupee lost one paisa or 0.01% to close at Rs 90.64. Dow Jones lost 614.74 points or 1.23% to close at 49,500.93 points. Dow gained on three of the five trading sessions and lost on two. The fall on Thursday in Dow was 670 points and that spooked markets in India on Friday as well. 

Friday was a double whammy for Indian markets. Firstly it was a reaction to Dow’s fall on Thursday and secondly, it was Friday effect where typically every weekend we see profit taking on account of geo-political considerations. This time we saw that markets corrected not only on these two reasons but also because FPI’s who have been buyers in February, turned big sellers on Friday and were net sellers to the tune of Rs 7,395 crores. The impact of this selling could spill over into Monday as well. 

The response of the two mainboard IPO’s which opened and closed during the last week was muted without doubt even though they were fully subscribed. The first was from Fractal Analytics Limited which was open from Wednesday the 11th of February to Friday the 12th of February. Subscription was 4.41 times in the QIB portion, 1.11 times in HNI portion and 1.08 times in Retail. Overall the issue was subscribed 2.81 times. 

The second issue was from Aye Finance Limited which was open from Wednesday the 11th of February to Friday the 12th of February. Subscription was 1.52 times in the QIB portion, 0.05 times in HNI portion and 0.81 times in Retail. Overall the issue was subscribed 1.04 times. 

Looking at the subscription numbers, the issues which are to list on Monday the 16th of February are likely to face a torrid time. 

One is hearing of about three issues which are likely to have their road shows in the coming week. Details of the same are yet awaited and would be shared once the same are available. 

Markets are trading in a broad zone and we need big news to break out or breakdown from the same zone. The broad zone at this point is 25,300 and 26,000. What we saw last week is the market hit the higher level and corrected. We are currently at 25,471 points and the next level of support is at 25,300 points. However, if this were to break and fail to recover, we are looking at support at levels of 24,700 points. Expect markets in the coming week to be volatile and choppy. Geo-political tensions will continue to drive markets in both directions. 

The strategy for the week would be to look for sharp dips to enter the markets and to exit any long positions on rallies. As mentioned earlier it is a trading market and one will have to play it by the ear. Trade cautiously.

Markets were volatile and as mentioned in last week’s article the moment they overcame STT blues, markets rallied strongly. They were up on four of the five trading sessions and many of doomsday predictions from people who spoke on television about India on budget day, seem to be now hiding. BSESENSEX gained 2,857.46 points or 3.54% to close at 83,580.40 points while NIFTY gained 868.25 points or 3.50% to close at 25,693.70 points. BANKNIFTY gained 1,703.35 points or 2.92% to close at 60,120.55 points. The broader markets saw BSE100, BSE200 and BSE500 gain 3.42%, 3.73% and 3.57%. BSEMIDCAP gained 3.51% while BSESMALLCAP was up 3.07%. The one sore point was the IT space, which got hammered quite sharply after Anthropic launched an artificial intelligence tool. Even in India, the BSEIT lost 6.80%. The lows made on budget day 1st February were at 79,899 points on BSESENSEX and 24,571 points on NIFTY. The highs made on Tuesday the 3rd of February were at 85,871 and 26,341 respectively. Volatility during the week on an intraday basis has been huge. 

News flow has been terrific. It all began with the India-EU deal after Republic day. Then the budget on 1st February where STT on F&O spooked the markets. Then the India-US deal where one gets the feeling that Donald Trump felt left out and realized that a country with 1.4 billion not being there is disadvantageous to the US. And finally, it appears that Iran-US conflict may not happen and simultaneously Ukraine will have to surrender as it runs out of money and supporters. With so much happening, markets had to respond sooner or later. 

The Indian Rupee staged a rebound gaining Rs 1.06 or 1.16% to close at Rs 90.63 to the US Dollar. Dow Jones at the end of four trading sessions was flat and then on Friday, it gained 1,206 points. Dow gained 1,223.20 points or 2.50% to close at 50,115.67 points. Dow gained on three of the five trading sessions and lost on two. 

There are two main board IPO’s in the week ahead. The two issues are from Aye Finance Limited which taps the markets with its fresh issue of Rs 710 crores and an offer for sale of Rs 300 crores in a price band of Rs 122-129. The issue opens on Monday the 9th of February and closes on Wednesday the 11th of February. The company is in the business of providing secured and unsecured loans to micro scale MSME in the manufacturing, trading services and allied agriculture including dairy industries. It is present in 18 states and three union territories. The company reported an EPS of Rs 9.34 on a fully diluted basis for the year ended March 25. Based on this EPS, the PE multiple is at 13.06-13.81. The company offers scope for appreciation looking at the multiples which its listed peers like SBFC Finance quotes at. 

The second issue is from Fractal Analytics Limited which is tapping the markets with its fresh issue of Rs 1,023 crores and an offer for sale of Rs 1,810 crores in a price band of Rs 857-900. The issue opens on Monday the 9th of February and closes on Wednesday the 11th of February. The company reported and EPS of Rs 13.96 on a fully diluted basis for the year ended March 25. Based on this EPS, the PE multiple is at 64.15-67.37. The company is a globally recognized enterprise artificial intelligence company with a vision to power human decisions in their client’s enterprises by leveraging AI. They support large enterprises with data driven insights. The company reported revenues of Rs 2,703 crores for the year ended March 2025 and Rs 1,518 crores for the six months ended September 25. PAT for the full year was at Rs 220 crores and at Rs 71 crores for the six months. 

In terms of competition, the RHP says that there are none. The PE for the company is therefore difficult to justify and comprehend as one fails to understand who is competition in India and globally. A few quarters post listing when information about the company is more widely available would help in understanding the company better. 

After last ten days the markets have established a broad range for itself with the highs and lows at levels of 24,500 and 26,300 points. Markets breaking either of these levels in the medium term looks unlikely. These could be further fine-tuned to support at 25,400-25,500 and resistance at 26,000 levels. One needs to get worried if either of these are broken. 

With trade deals having been done, global cues showing signs of improving relations across the board, oil prices stabilizing, its time markets looked at performance of companies and economy. While in India, economy is in fine fettle what is bothering or bothersome is performance of companies. They have not done as per expectation and as a result the broad market looks expensive, offering fewer choices for investment opportunities. 

The strategy would be to look for outstanding results in the week ahead which would be the last week for the current quarterly results and look for fresh investment opportunities. Fine print of the US trade deal is still some time away but basics announced so far, show no cause for the drama that the opposition enacted in Parliament. 

Trade cautiously and look for fresh ideas and investment opportunities.