The week gone by saw markets which were volatile and had large Intraday movements. They gained on two of the five trading sessions and lost on three. BSESENSEX lost 609.51 points or 0.74% to close at 81,721.08 points while NIFTY lost 166.65 points or 0.67% to close at 24,853.15 points. BANK NIFTY was up 43.35 points or 0.08% to close at 55,398.25 points. The broader markets saw BSE100, BSE200 and BSE500 lose 0.55%, 0.54% and 0.40% respectively. BSEMIDCAP lost 0.32% while BSESMALLCAP gained 0.93%.
The Indian Rupee gained 30 paisa or 0.35% to close at Rs 85.21 to the US Dollar. Dow Jones gained on one of the five trading sessions and lost on three. On the fifth session it was flat with a net movement of a mere 1.35 points. Donald Trump has threatened Apple, the makers of iPhone with a 25% import tariff on the phone it brings into the US. Currently these phones are sourced from China and recently over a couple of years ago, India, amongst others. The biggest losers if this were to happen would be Americans as the prices of the product would shoot up. Not sure what Trump tariffs will do the country or what is in the mind of the President.
Primary markets have got a big boost since the tension of India-Pak had a release in the four-day skirmish. Post that the primary markets have got active. We had two mainboard IPOs which were open last week and four would be opening and closing this week. These are from Schloss Bangalore Limited, Aegis Vopak Terminals Limited, Scoda Tubes Limited and ProstarM Limited. The issues which closed last week were from Borana Weaves Limited and Belrise Industries Limited.
Results season has almost come to the end with the last week for declaration starting. By and large they have been on expected lines. The silver lining would be that there have been two rate cuts in the recent past and there could be two more that follow. With India inc. expected to do well in the coming quarters, this could flow to the bottom lines of companies and help in the valuations reducing on an optic level. Valuations is the one thing that is coming in the way of our markets moving in any big way.
FPIs have been buying and selling on different days depending on the market movements and the earlier trends that existed seem to have vanished. This keeps the markets active. In the week ahead, Thursday the 29th of May would see May futures expire. Currently, bulls have the upper hand with series gains of 606.45 points or 2.5%. With four days to go, bulls are comfortably placed as there is nothing in the news that can upset markets in this manner. Clearly the bulls have a comfortable lead and should take the series.
Markets have support at levels of 24,400-24,500 and if this were to break lower down at levels of 23,800-23,850 points. Markets have resistance at levels of 25,150-25,200 points. Very clearly, we need news, to break out of this trading zone. Readers would recall how one single day the 12th of May we saw BSESENSEX gain 3,000 points and NIFTY gain 916 points, which simply lifted the markets and like the ‘BRAMOS’ missile catapulted markets into a new territory. Some news of this kind is needed to boost the sentiment and bring new momentum.
The strategy would be to start building a portfolio. With results almost over, new ideas based on performance and guidance should be the focus area. Do not expect to much of news from the US as actions o their President defy logic.
Trade cautiously.
