Markets began the last week of the calendar year on a negative note and lost on three of the four trading days during the week. They gained only on Friday and recovered a substantial portion of the losses but still ended the week on a negative note. BSESENSEX lost 106.40 points or 0.26% to close at 41,575.14 points while NIFTY lost 26 points or 0.21% to close at 12,245.80 points. The broader market saw BSE100 and BSE200 lose 0.08% and 0.02% respectively while BSE500 gained 0.06%. BSEMIDCAP gained 0.63% and BSESMALLCAP was up 1.17%.
The Indian Rupee lost 24 paisa or 0.34% to close at Rs 71.36 to the US Dollar. Dow Jones gained 190.17 points or 0.67% to close at 28,645.26 points.
As mentioned earlier, the week was down for the first three trading days which ended with a sell-off on expiry day. Thursday saw the BSESENSEX lose 298 points and NIFTY was down 88 points. December futures expired in the negative with losses of 24.60 points or 0.20%. At the start of the week, the series had seen gains of 120.65 points or 0.99%.
Friday, the beginning of January futures was a different event altogether. BSESENSEX gained 412 points and NIFTY was up 119 points. Reliance on expected lines and as mentioned last week was down. It lost Rs 57 or 3.56% to close at Rs 1,542.
The week ahead would see the listing of Prince Pipes and Fittings Limited. The company had tapped the capital markets with its fresh offer of Rs 250 crs and an offer for sale of Rs 300 crs. The issue was subscribed 2.21 times. The listing is expected to be tepid and under pressure as the grey market premiums have disappeared and the share is quoting at a discount.
There are two issues confronting the listing of Prince Pipes. The first is a dispute in a realty case with the promoters in their personal capacity. The size of the dispute is big and the opposing party had filed a fresh matter during the course of the IPO resulting in the company having to file a rejoinder and corrigendum. The second issue concerns the performance of the company considering the anti-dumping duty levied on imports of resin and compound from China and Korea. This makes the C-PVC business under severe pressure.
The week ahead has two trading sessions in the calendar year 2019 and then the remaining in the New Year 2020. There would be NAV propping or supporting over the next two days of the midcap and Smallcap stocks as mutual funds and more so Portfolio Managers look to juggle their performance. This will help in reducing the losses that the midcap and Smallcap indices have suffered in the calendar year 2019.
There is speculation that the list of stocks which have been classified as large cap, mid-cap and Smallcap would be relooked at by SEBI in the coming days and weeks. What would be the final outcome of such a review if any, is highly speculative, but the street believes that the midcap and Smallcap stocks would get a better deal. One can only keep one’s fingers crossed and hope for the best.
The calendar year is coming to an end and the benchmark indices would have ended with flying colours. Assuming there are no major changes in the remaining two days, BSESENSEX would have moved from 36K levels to 41.5K while NIFTY would have moved from 10.8K levels to 12.2K. The gains during the year would be in the region of 15% for the SENSEX and about 12.5-13% for NIFTY.
The week ahead would be divided into distinct halves with the first being the remaining two days of the calendar year where NAV propping would be the order of the day in the midcap, Smallcap and micromini cap space. New Year’s Day would be a very low volume day as almost the whole world enjoys a holiday except Indian markets. The second part of the week would be the remaining two days of the week where there would be volatility and the bulls and bears begin their tussle for supremacy again. Markets would be going nowhere. The undertone however is bullish and one should use dips to buy into the market.
Trade cautiously.
