In the week gone by, markets were volatile and had huge intraday movement as well. They did close at new lifetime highs on intraday and closing basis. However, there were plenty of ups and downs which accompanied this rise as well. BSESENSEX gained 1,032.58 points or 1.75% to close at 60,048.47 points while NIFTY gained 268.05 points or 1.52% to close at 17,853.20 points. The broader indices saw BSE100, BSE200 and BSE500 gain 1.30%, 1.15% and 1.08% respectively. BSEMIDCAP gained 0.59% while BSESMALLCAP was up 0.06%. Market gained on three of the five days and lost on two. The intraweek low on BSESENSEX was 58,232.54 points and 17,326.10 points on NIFTY. The intraday highs registered on Friday were 60,333 points and 17,947.65 points respectively.
The reason why the intraweek lows and highs are being highlighted is to give a sense of the sharp movement witnessed during the week. BSESENSEX lost 800 points and then gained 2100 points, a total movement of 2,900 points. NIFTY similarly lost 160 points and then gained 620 points, for a total movement of 780 points.
The Indian Rupee lost 22 paisa or 0.30% to close at Rs 73.70 to the US Dollar. Dow Jones ended the week with gains of 213.12 points or 0.62% to close at 34,798 points. This close was on the back of losses for the first two days of the week, followed by consecutive gains on the remaining three days with Friday being the day with least gains of a mere 33 points.
The week saw realty stocks shoot through the roof and the normally quiet BSEREALTY index gained a massive 21.31% and close at 4,002.46 points. The top sectoral loser was BSEMETAL which was down 3.49%.
In economic news, gross tax collections were at Rs 6.46 lac crs as on 22nd September which were up 47% compared to a year ago. Similarly, net direct taxes were at 5.71 lac crs, up 74% compared to a year ago. These numbers indicate the buoyancy in the economy, and point to significant rebound in the economy. This could be a precursor to increase in corporate profits in the coming quarterly results.
Zee Entertainment continued to be in the news and was the top gainer for the week, up Rs 63.55 or 24.89% at Rs 318.85, after it announced the proposed merger with Sony Entertainment. The wily Subash Chandra has negotiated a deal where Punit Goenka would continue to remain at the helm of affairs of the merged entity. It appears Invesco wants the company to call the EGM even after the Sony deal. While there is a 90-day period to complete due diligence, there would be ifs and buts in the process, but it appears that the Zee issue is far from resolved.
Shareholder activism is gaining momentum and after the earlier issues involving Zee’s two directors, Eicher Motors and All-Cargo delisting, it was time for IDFC. Here the minority shareholders rejected the reappointment of Vinod Rai as director. This activism is a good sign for corporate INC and would be a wake-up alarm for promoters to not take shareholders for granted.
In primary market news we had one issue tapping the markets, yet another getting listed and the third having its roadshow for the issue opening next week. Paras Defence and Space Technologies Limited had tapped the capital markets with its fresh issue for Rs 140.6 crs and an offer for sale of 17,24,490 equity shares in a price band of Rs 165-175. The issue had received phenomenal support and became the most oversubscribed issue since 2007, getting oversubscribed 304.26 times. QIB portion was subscribed 169.65 times, HNI portion 927.70 times and Retail portion was subscribed 112.81 times. There were over 36 lac applications. The issue which set out to raise about Rs 170 crs, garnered subscription of Rs 38,071 crs.
Shares of Sansera Engineering Limited which had tapped the markets with its OFS for 1,72,44,328 shares in a price band of Rs 734-744 listed on the bourses on Friday. The discovered price was Rs 811.35 and the share closed at Rs 818,70, a gain of Rs 74.70 or 10.04%. The share had a sedate beginning but unlike many shares on debut was fairly range bound on opening day with a range of just under 6%. The intraday high and low was Rs 842-800.80.
The offer for sale of 3,88,80,000 equity shares of Aditya Birla Sun Life AMC Limited in a price band of Rs 695-712, opens on Wednesday the 29th of September and closes on Friday the 1st of October. The company has earned an EPS of Rs 18.27 for the year ended March 2021, and the PE band for the issue is at 38-04-38.97. The company is jointly promoted by the Aditya Birla group and SunLife Insurance Co Ltd.
The AMC is the 4th largest by AUM and would be the 4th company from the sector to list after HDFC AMC, Nippon Mutual Fund and UTI AMC. The company has a total AUM of 2.93 lac crs of which 36.5% is in equity, 59.5% is in non-equity and 4% in other assets. Looking at the under penetration in India of saving products, lack of retirement products which beat inflation, the mutual fund industry has excellent prospects going forward. Given the dynamics and the performance of stock markets over the last 15-18 months and the expected traction, post covid recovery, this industry has a great future. Investment is warranted considering the pedigree of the company and its valuations compared to its peers.
On the covid-19 front, the world saw 23,25,97,787 patients, 47,61,895 deaths and 20,92,20,942 patients recovering. In India we saw 3,36,78,243 patients, 4,47,225 deaths and 3,29,24,420 patients recovering. Compared to the previous week, the world saw 33,09,540 new patients, 56,434 deaths and 33,12,001 patients recovering. In India we saw 2,00,424 new patients, 2,060 deaths and 2,16,831 patients recovering. The total number of people who have received their vaccination in India touched 85.60 cr, which is higher by 5.17 cr compared to the previous week. This would correspond to 74 lac vaccinations average per day for the week. This number would include both first and second vaccination doses.
Coming to the markets in the week ahead, we have September futures expiring on Thursday the 30th of September. Currently the series is up a massive 1,216.30 points or 7.31% from the opening level of 16,636.90 points. With a huge and almost unassailable lead and a mere four days to go, bulls have complete control over the series and will toy with the bears in the coming days. Markets have seen BSESENSEX cross an important psychological level of 60K on Friday and as the street jokes, BSESENSEX has finally become a senior citizen. Similarly, the street expects NIFTY to become a major in the coming week by crossing 18K. While these are just symbolic numbers and nothing more, one could expect volatility to remain at significantly high levels.
There would be swift intraday moves and markets would move in both directions. Some technical indicators suggest that there was a cooling off effect witnessed on Friday which could be a second half profit booking spree or just a typical Friday effect. For the records, the advance-decline ratio was negative for the day, indicating caution.
The strategy for the coming week would be to continue to book profits on rallies and buy on sharp dips with the focus being on large cap stocks. Very few select midcap stocks could be looked at. While the current month has seen FPI being net buyers for the month, one is not sure what October would be like. The coming month would also see results being declared for the July-September quarter which could lead to stocks being re-rated or downgraded. The week would be super volatile and needs to be cautiously traded.
