It was a tough week for the markets as substantial gains made during the first three days were wiped out and then converted into a weekly loss. This incidentally is the fourth consecutive weekly loss for the markets. During the week, markets lost on three of the five trading sessions and gained on two. BSESENSEX lost 294.64 points or 0.36% to close at 81,463.09 points while NIFTY lost 131.40 points or 0.53% to close at 24,837 points. BANK NIFTY gained 245.90 points or 0.44% to close at 56,528.90 points. The broader markets saw BSE100, BSE200 and BSE500 lose 0.73%, 0.89% and 1.10% respectively. BSEMIDCAP lost 1.71% while BSESMALLCAP was down 2.49% which gives you the sense that market breadth was substantially negative. 

The Indian Rupee lost 44 paisa or 0.51% to close at Rs 86.59 to the US Dollar. Dow Jones gained 559.73 points or 1.26% to close at 44,901.92 points. It gained on three of the five trading sessions and lost on two. 

IPO season is on full throttle. We have one issue closing today. Besides the issue from Brigade Hotel Ventures Limited (closing today), we have six other issues which would open and close in the week ahead. Very clearly, primary markets are in full flow. 

The issues are from NSDL, Aditya InfoTech, M&B Engineering, Shanti Gold International (which has opened on Friday), Sri Lotus Developers and Laxmi India Finance.  

The price band for NSDL which is entirely an offer for sale is Rs 760-800, well below the unlisted price which was traded above 4 digits and hovered in the range of 1100-1275 till a few days back. Post announcement share prices in the unlisted market have crashed and now trade at their low of 1025. The shares are now not transferable and are effectively locked in. After, HDB Financial this is the second share in which IPO prices are way below traded prices on the unlisted market, causing huge losses to new investors. Time for investors to take serious note of this fact and understand that the unlisted platform need not necessarily create money for investors. 

Results season is on and is certainly not one which would make investors happy. Expectation of a steady and improved performance from corporate India has been belied and they could be termed as a tad below average so far. Could things change going forward, seems unlikely? Companies with better results tend to declare them in the earlier period of the 45 day window for declaring results. This is one big disappointment for the markets and responsible in a big manner for the poor state of affairs in the markets. The much awaited India-US trade deal seems to be getting delayed and making markets nervous. The commerce Minister has recently said that the same would be done by 1st August, but one would have to keep fingers crossed. This now seems to be the only big potential news driver for markets. 

The week ahead sees July futures expiring on the last day of the month, 31st July. The current position of the series is even Stevens with gains of a mere 3.40 points or 0.01%. The series had begun at 24,833.60 points and is currently at 24,837 points. It’s anybody’s game over the next four days, but the scales are tilted in favor of the bears. With the present mood and sentiment, markets are likely to continue to remain under pressure. 

Currently there is surfeit of paper in the market with FPIs being aggressive sellers, plenty of IPOs and every other day market offers from PE investors and promoters taking place on the exchange platform. So far in the current month of July, FPIs have been net sellers of Rs 30,500 crores while Domestic institutions have been net buyers of Rs 39,800 crores. More than matched but segments are different. 

Coming to levels, 25,250-25,300 is becoming a strong band of resistance and would need very big and positive news flow to be surmounted. On support side, levels of 24,500 would act as support and lower down at 25,200 around. Looking at it from a trading zone perspective the broad range is currently now 24,500 to 25,200 with a downward bias. The strategy would be to remain light from a trading perspective and look to rebalance the portfolio post the quarterly numbers. Many new investment opportunities would be available after these results. 

Trade cautiously.

The expectation of US-India trade deal kept markets on tenterhooks right through the week. Net outcome, ZERO. Nothing happened, nothing announced. We are still waiting. Therefore markets did the obvious, uncertainty and nothing happened. They slipped and lost ground. BSESENSEX lost 932.42 points or 1.12% to close at 82,500.47 points while NIFTY lost 311.15 points or 1.22% to close at 25,149.85 points. BANKNIFTY lost 277.20 points or 0.49% to close at 56,574.70 points. The broader markets like BSE100, BSE200 and BSE500 lost 1.24%, 1.24% and 1.14% respectively. BSEMIDCAP lost 1.12% while BSESMALLCAP was down 0.63%.  Markets lost on three of the five trading sessions and gained on one. They were flat on Monday, the opening day of the week. 

The India Rupee lost 29 paisa or 0.34% to close at Rs 85.79 to the US Dollar. Dow Jones gained on two of the five trading sessions and lost on three. Dow lost 1.02% or 457.01 points to close at 44,371.51 points. Trump has imposed retaliatory tariffs on neighboring countries and many more globally as well. One is not sure where this would lead the US to. On the flip side, many of the countries who would be impacted by the US tariffs are working out deals amongst themselves and ensuring that it is business as usual for their economies. 

In primary market news, shares of Crizac Limited who had issued shares at Rs 245, listed on Wednesday the 9th of July. Shares gained Rs 62.45 and closed at Rs 307.45. By the end of the week, they gained further and closed at Rs 338.65, a gain of Rs 93.65 or 38.22%. 

The week ahead sees the offer for sale from Anthem Biosciences Limited tapping the capital markets from Monday the 14th of July to Wednesday the 16th of July. The issue consists of an offer for sale of Rs 3,395 crores in a price band of Rs 540 to 570. The company is a CRDMO – contract research development and manufacturing organization with fully integrated operations spanning across drug discovery, development and manufacturing with integrated New Chemical entity and New Biological Entity Capabilities. 

The company reported revenues of Rs 1,844.55 crores and a PAT of Rs 451.crores for the year ended March 25. The net margins are a healthy 23.4%. The EPS is Rs 8.04. The PE multiple on a fully diluted basis is at 67.16-70.90. The key takeaway from this offer for sale is that the promoter founder of the company would continue to hold over 52% of the company and is not selling a single share in the entirely an offer for sale issue. This is a big comforting factor for investors who are nowadays very vary of entire offer for sale issues. 

Coming to the markets in the week ahead, they are under pressure, no doubt. Trump tariffs have been a pot boiler and with the Indian Government very firm on not relaxing trade terms on agriculture and dairy products as requested by USA, things are taking longer. This has led markets to weaken and now in danger of slipping further. Initial results for the April-June quarter have not been the best and TCS was a bad start to the reporting season. Further results from the sector would be watched to see if the trend continues or was an isolated case. 

Key pivot for the market is the band of 24,900-25,100 for the NIFTY. Whichever direction the markets move from here, there would be a 400 points or thereabout runway for markets. Effectively, this is a safety zone and violation of the same alone would lead to volatility in the markets.  The strategy would be to lie low and allow some sense from results to kick in. The expectation of better results for the quarter not coming could be the joker in the pack. 

Await trade deal and trade cautiously.