The week gone by had plenty of action and drama not only in the markets but also on the geo-political front. For the first time since India was singled out for buying Russian crude oil, USA now seems to be wanting to tread a middle path and come to level playing field. Trump who uses social media to say things, said that Modi is a friend to which the Prime Minister for the first time in six weeks responded by saying that India and the US share a “very positive and forward-looking” global strategic partnership. Does this mean things will be normalised? Not sure, but it’s better than what it was. There is hope. 

Getting back to the markets we saw them gain on three of the five trading sessions and lost on two. BSESENSEX gained 901.11 points or 1.13% to close at 80,710.76 points while NIFTY gained 314.15 points or 1.29% to close at 24,741 points. NIFTY gained on four of the five sessions and lost on one as it managed to close in the black on Friday, gaining seven points while BSESENSEX lost 8 points. Suffice to say that Friday was a flat day. BANK NIFTY gained 448.90 points or 0.84% to close at 54,114.55 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.36%, 1.44% and 1.57% respectively. BSEMIDCAP was up 1.83% while BSESMALLCAP was up 2.53%. 

The GST council announced the new rates of GST on Wednesday evening and markets reacted to them on Thursday. They opened gap-up but left a lot to be desired thereafter. The open was the high on both exchanges and they closed substantially lower. The open on BSESENSEX was at 81,456.67 points against the previous day’s close of 80,567.71 points. The close was at 80,716.01 points. A gap up open of 888.96 points ended at a net gain of 150.3 points. Similarly the open on NIFTY was at 24,980.75 points against the previous day’s close of 24,715.05 points. The close was at 24,734.30 points. A gap up open of 265.70 points ended at a net gain of a mere 19.25 points. Such a big news was digested instantly. The top sectorial gainers were BSEMETAL and BSEAUTO which gained 5.84% and 5.22%. One can expect the auto sales to improve in the upcoming festive season post the new price announcements by the OEM’s. 

The Indian Rupee lost 8 paisa or 0.09% to close at Rs 88.27 to the US Dollar. Dow Jones was in range bound territory and lost on three of the four trading sessions, gaining on just one. It lost 143.62 points or 0.32% to close at 45,400.86 points.

India Inc. results for Q1 as a whole were disappointing as per various reports. Revenues grew by 3.4% on a year on year basis which is the lowest over the previous seven quarters. IT sector grew the lowest in five quarters. On the positive side, companies like Reliance and Indian Oil outperformed with higher refining margins. 

The overall performance does put pressure on markets going forward. 

Coming to the primary markets, we had one listing in the previous week. Shares of Vikran Engineering saw a muted listing with its shares closing day one at Rs 95.64, against an issue price of Rs 97. It clearly was a muted start. Over the remaining part of the week, the share did not do much and closed at Rs 95.02, a loss of Rs 1.98 or 2.04%. 

There are three mainboard IPO’s happening in the week ahead. The first of them is Urban Company Limited which is tapping the markets with its issue size totalling Rs 1,900 crores in a price band of Rs 98-103. The issue comprises of a fresh issue of Rs 472 crores and an offer for sale of Rs 1,428 crores. The company is a technology driven, full stack online service market place providing services and solutions across home and beauty categories. The company has turned profitable in FY25. It seems an interesting option and has seen good growth in services offered and executed. Importantly it appears that there is no competitor currently. 

The second issue is from Shringar House of Mangalsutra Limited which is tapping the markets with its fresh issue of 2.43 crore shares in a price band of Rs 155-165. The company is a manufacturer of Mangalsutra and it is the only item of jewellery that it manufactures. Its revenues for FY25 were at Rs 1,429 crores. The company has a 6% market share in the organised Mangalsutra market. The company reported an EPS of Rs 8.57 for the year ended March 25. 

The third company is Dev Accelerator Limited which is tapping the markets with its fresh issue of 2.35 crore shares in a price band of Rs 56-61. The company is a managed space operator in Tier 2 markets and has a substantial space in them. The object of the issue is for growth and the company would be doubling its present space with handover to begin in the next four to six months for half of the new space and the balance to begin in 12-16 months. The addition of these two spaces would make the company have a total space of approximately 1.6 million square feet with more in the pipeline. 

The above three IPO’s would all open on Wednesday the 10th of September and close on Friday the 12th of September. 

The markets in the week ahead would continue to be choppy and volatile. Geo-political developments would be closely watched after the successful SCO meeting held in China where China, Russia and India presented a good photo-op, close cooperation and enough signs to shake the West about new developments happening. The fact that Donald Trump is now trying to salvage relations is an indication that bullying is now a thing of the past. Trump and his tariff tantrums continue with little or no clarity available. The worst for India as of now is more or less decided, unless he now turns vindictive and decides to come after software and IT.  

Expect markets to find strong support at levels of 24,300 around on NIFTY and resistance at levels of 25,150-25,200 points. There are no immediate news flow expected other than trade agreements which will keep on happening over the next few months. USA and their tariffs will take a backseat as people are quite fed up with bickering and wavering of what Trump does. The strategy would be to refrain from taking large overnight positions for the time being and restrict to intra-day positions only. Portfolio building should be kept aside for the time being till geo-political clarity emerges. 

Trade cautiously.

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The week gone by had a mid-week holiday on Wednesday followed by Thursday’s futures monthly expiry for August series which led to markets being volatile and on tenterhooks. As expected they ended the week with losses and lost on three of the four trading sessions and gained on one session. BSESENSEX lost 1,497.20 points or 1.84% to close at 79,809.65 points while NIFTY lost 443.25 points or 1.78% to close at 24,426.85 points. BANK NIFTY lost 1,483.75 points or 2.69% to close at 53,665.65 points. BSEMIDCAP lost 2.72% while BSESMALLCAP was down 2.93%. All in all, it was a bad four days at the markets and they were down across the board. The mood is depressing and in the coming week while there could always be a technical bounce because we are oversold, the news flow is missing. 

The Indian Rupee lost 68 paisa or 0.78% to close at Rs 88.19 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It lost 87.26 points or 0.19% to close at 45,544.48 points. Trump continues to remain piqued about the fact that India did not support or nominate him for the Nobel Peace prize for a war in which he did not mediate. The tariffs that he has imposed on India are due to this fact and he being cheated off the award by India not supporting. Now even the Supreme Court in the USA has upheld the lower courts order on declaring these tariffs as wrong. While they have not been struck down, Trump has to do something out of the ordinary to salvage a lot of prestige, as every act of his is being questioned. The people who voted for him will get what they deserve for sure but ‘MAGA’ (make America great again) his pet theme has taken a big beating. One other thing that common citizens are realizing is that tariffs are to be paid by them. 

There were four listings last week and all of them happened on Tuesday the 26th of August. While they all managed to close in the green on listing day, one of them slipped into the red over the remaining two days of the week, while the remaining three pruned their gains substantially. Vikram Solar gained Rs 4.45 or 1.34% to close at Rs 336.45, Shreeji Shipping Global gained Rs 0.45 or 0.18% to close at Rs 252.45, and Patel Retail gained Rs 7.05 or 2.76% to close at Rs 262.05 while Gem Aromatics lost Rs 48.90 or 15.05% to close at Rs 276.10. Very clearly there is fatigue in the primary markets with investors not making money by and large. To add to their woes is the fact that even the secondary market is not doing well and corporate India results for QI left a lot to be desired. 

August futures expired on a weak note with the series losing 267.45 points or 1.08% to close at 24,500.90 points. Readers would recall that the week had begun with the series up at 101.75 points or 0.41%. Bears have clawed their way back into the series and won it quite decisively. 

In economic news, GDP for the first quarter has come in a positive manner at 7.8%. While there are some adjustments which have to be factored in, it still remains impressive. 

Coming to the markets in the week ahead, there is a possibility that on technical factors we could bounce to around 24,800 points at best. On the downside we have strong support between 24,200-24,250 points. If this were to break we could go down all the way to 23,600-23,700 points. These are important levels on both support and resistance side and not levels for the week. They could take longer than just a week to happen. Further, with fast developing changes on the global front, it’s a fluid state with just too many moving parts. The SCO meet in China could see important announcements happening and strong reactions coming in from the US. Ukraine and Russia war is just going on for too long and it’s high time that the two countries met face to face to resolve this never ending war. 

The strategy for the week would be to continue with intra-day trading and refrain from large overnight positions. The week ahead could also see the GST council announcing changes in the categories which are moved out from the 12% and 28% and where they would now be placed. Also the new rates applicable for ‘Sin’ category products. Therefore makes sense to refrain from large overnight positions. 

Trade cautiously.