The week gone by had a trading holiday on Friday on account of India celebrating its 79th Independence Day on Friday the 15th of August. It was one where there was lot of expectancy on the geo-political front as well. While it could be termed as work in progress, nothing dramatic or really positive happened. At the end of trading, markets gained on three of the four trading sessions and lost on one. BSESENSEX gained 739.87 points or 0.93% to close at 80,597.66 points while NIFTY gained 268 points or 1.10% to close at 24,631.30 points. BANKNIFTY gained 336.95 points or 0.61% to close at 55,341.81 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.13%, 1.08% and 1.07% respectively. BSEMIDCAP gained 0.92% while BSESMALLCAP was up 0.37%. 

The Indian Rupee gained 17 paisa or 0.19% to close at 87.53 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It was up 770.51 points or 1.74% to close at 44,946.12 points. Dow is a little over 100 points away from its lifetime high which is at 45,073.63 points made on 4th December 2024. The Putin-Trump meeting at Anchorage in Alaska was not an outcome which the street was expecting. With Zelenskyy and EU leaders to meet Trump in the US today (Monday), markets will be kept on tenterhooks. 

As far as India is concerned, the news to rejig GST rates is big news for the markets. The 12% and 28% tax rates are proposed to be scrapped. While the rational for doing the same is great, there could be opposition from the opposition states as their share of collection would go down. The opening rally would be great for the markets but there could be a setback when the GST council meets in the latter half of the week on Thursday. 

On the flip side, the proposed trade talks between India and the USA have been called off and no new date has been announced as of now. This could be a short term dampener for markets after a strong rally. 

We had two IPOs listing on Thursday the 14th of august. The first was JSW Cement Limited which had issued shares at Rs 147. After the discovered price of Rs 153, the share lost its way and closed lower at Rs 146.05, a loss of Rs 0.95 or 0.65%. 

The second share to list was All Time Plastics Limited which had issued shares at Rs 275. The discovered price was Rs 314.30 but the closing price was Rs 283.25. The gain was Rs 8.25 or 3%. It could be said that the listings were subdued and somewhere or the other there is a fatigue factor in the primary markets which seems to be setting in. 

The week ahead has a spate of public issues with four issues opening on Tuesday the 19th of August and closing on Thursday the 21st of August. The first is from Vikram Solar Limited, followed by Gem Aromatics Limited, Patel Retail Limited and Shreeji Shipping Global Limited.  

Coming to the markets in the week ahead, expect them to open with a huge gap up opening. Whether they are able to gain further would be an important issue. The sustaining of the gap-up opening would be dependent on global cues coming from Trump-Zelenskyy meeting and rapid developments thereafter. There would be hope that the additional tariffs on India may not be imposed. Expect strong support at levels of 24,200-24,300 on NIFTY and resistance at 25,200 or thereabouts. This would be a good trading week for people looking to make short term gains. 

The key events would be two-fold. Firstly, tariffs which are linked to the Russia and Ukraine war and therefore India as we are close to Russia and secondly, the impact of GST changes once they are approved in course of time in the GST council. Both would have far reaching consequences on the markets. Take it as the news comes. Importantly, it’s all work in progress, with nothing finalized. 

Trade very cautiously.

The week gone by was full of Trump and his way of dominating center stage globally. He imposed the penalty tariff of doubling the existing 25% on India to 50% because we import crude from Russia. Incidentally Europe imports its energy needs from Russia while the USA imports chemicals and many other products but in value significantly larger amounts than India. Suffice to say, that logic has taken a back seat and currently it’s all about ‘bullying’ and seeing who stands up or buckles under. For the records, Switzerland has invited the wrath of Donald Trump by cancelling their order of F-35 and attracted huge tariff, at 39%, the highest amongst European nations. Spain too has cancelled the fighter aircraft order. India has an order of about 80 billion USD with Boeing for passenger aircraft. Our total exports to the US in fiscal 2024 were at 87.3 billion USD. If India decides to review orders of Boeing considering safety issues with the crash of Dreamliner, things could change dramatically. Let’s just leave tariff and Trump at that with a final comment that Trump and Putin are expected to meet in Alaska on the 15th of August over Ukraine. 

Markets in India fell on three of the five sessions and gained on two. BSESENSEX lost 742.12 points or 0.92% to close at 79,857.79 points. NIFTY lost 202.05 points or 0.82% to close at 24,363.30 points while BANK NIFTY lost 612.70 points or 1.10% to close at 55,004.90 points. The broader markets saw BSE100, BSE200 and BSE500 lose 0.88%, 0.95% and 1.04% respectively. BSEMIDCAP was down 1.29% while BSESMALLCAP lost 1.86%. Markets are nervous and worried about the continuous supply of paper which is coming from IPOs, secondary paper sold by PE investors and promoters. FPIs have sold Rs 47,666 crores in July 25 and sold another Rs 14,000 crores in the first eight days of August.

The Indian Rupee lost 19 paisa or 0.22% to close at Rs 87.70 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It was up 587.03 points or 1.35% to close at 43,588.58 points. The entire world is focused on what tantrums, tariffs and statements Trump makes. If Ukraine-Russia issue does get settled over the weekend in Alaska, one should be rest assured that demands for Trump to be nominated for Nobel Peace Prize would begin all over again. I am sure no one will bother as long as he does work in the White House rather than put global economy at such risk as is currently happening. 

Coming to our markets, this was the sixth consecutive week of losses. Sooner or later there would be a technical bounce, but that would be just that, a technical bounce. It could be for a day, a couple of days or could also be a weekly positive, to break the negative trend. I t would not indicate that things have turned around. New global normal are yet to be made and established. Very clearly, USA is turning out to be a fair weather friend only and it has no long-term relationships as is evident. With India playing its cards well and looking to strengthen ‘BRICS’ with the first four partners, Brazil, Russia, India and China, coming closer and willing to counter USA and its bullying tactics, new long term relationships are likely to emerge. In such a scenario, one needs to be patient with markets, absorb short term pain, and wait to build a portfolio all over again. Things are work in progress and many new scenarios would emerge. Who would have thought that ‘BRAMOS’ missile would become such a big super success and India would receive orders and enquiries from so many countries. Things are changing and we need to understand that when a nation rises in ranks, there is resentment at the top. 

The primary markets are in full bloom and we have IPOs galore. Besides the issues from JSW Cement Limited and All Time Plastics Limited which have opened and would close today, i.e. 11th August, we have issues from Blue Stone Jewellery and Lifestyle Limited and Regaal Resources Limited which are opening during the week. While Bluestone opens on Monday the 11th of August and closes on Wednesday the 13th of August, Regaal would open on Tuesday the 12th of August and close on Thursday the 14th of August. There would be a few road shows happening as well, with their IPOs opening in the week of 18th of August. 

Expect markets to trade in range bound fashion. Support exists at levels of 24,200 points where we are almost there. If this were to break we could see levels of 23,800-23,850 points. On the upside we could see levels of 24,800 or thereabouts. The week has an extended weekend with a holiday on Friday, the 15th August when we celebrate our 78th Independence Day. This would make markets nervous on Thursday, with what could happen in Alaska and also what PM Modi speaks from the ramparts of Red Fort on 15th August. Incidentally both events happen on Friday the 15th of August. 

The strategy in such troubled times would be to lie low and allow markets to seek their own levels. Things are tough, but by being adventurous nothing much is likely to be achieved. Let some clarity emerge before taking any decisions. 

Trade cautiously.