Muhurat trading for Vikram Samvat 2076 took place on Sunday 27th October and markets gained. BSESENSEX was up 192 points while NIFTY gained 44 points. Samvat 2075, the year gone by saw the benchmark indices register gains. BSESENSEX gained 3,820.39 points or 10.84% to close at 39,058.06 points. NIFTY gained 985.5 points or 9.29% to close at 11,583.90 points. The midcap and Smallcap indices registered losses. The year had begun on Wednesday the 7th of November 2018. It was a tough year for the markets and they struggled for some time before some momentum came in post Balakot strike in February 2019 and then the resounding mandate to the NDA in May 2019. Post the new all-time high in May, markets then saw corrections on global cues, slowdown in the Indian economy, China-US trade war and so on.

If one is to look at the performance of Muhurat trading and try to infer what the year ahead has in store there is not much one can infer. The new year saw BSESENSEX gain 192 points and NIFTY gain 44 points. Last year BSESENSEX gained 246 points and NIFTY gained 68 points on Muhurat day. What is even more interesting is the intra-day movement which certainly is comparable. The indices open with a gap and almost near the day’s high from where they cool off. This year the BSESENSEX open was 39,397, high 39,402, low 39,180 and close 39,250. Last year it was open 35,301, high 35302, low 35,183 and close 35,237. Similarly, on NIFTY this year it was open 11,662, high 11,672, low 11,604 and close 11,627. Last year it was open 10,614, high 10,616, low 10,582 and close 10,598. The only thing that stands out is that markets open around the top and lose some ground but continue to remain positive.

Coming to the previous week which began with a trading holiday on Monday 2st October for state elections in Maharashtra and Haryana, markets lost ground. BSESENSEX lost 240.32 points or 0.61% to close at 39,058.06 points while NIFTY lost 77.95 points or 0.67% to close at 11,583.90 points. The broader indices saw BSE100, BSE200 and BSE500 lose 0.75%, 0.61% and 0.56% respectively. BSEMIDCAP lost 0.54% while BSESMALLCAP gained 0.20%. Markets gained on two of the trading days and lost on the remaining two days.

Dow Jones gained 110.11 points or 0.41% to close at 26,958.06 points. The Indian Rupee gained 26 paisa or 0.41% to close at Rs 70.88 to the US Dollar.

Markets have been lacklustre for sometime and one always uses important events to reflect on the past and look into the future. Diwali is a good time to do so. The beginning of Vikram Samvat on Sunday the 27th of October is expected to see benchmark indices perform better than the previous Samvat year. The slowdown notwithstanding, the economy is expected to rebound in a couple of quarters on the back of tax cuts already announced and some more measures which may or may not be announced. The oil and gas sector and the BFSI space could see sharp recovery. The former on the expected divestment of BPCL which would lead to a rerating of the sector and the latter because it has been beaten down with a number of companies involved in unhealthy practices. Some names for example include DHFL, ILFS, YES Bank and the India Bulls group of companies.

Insurance is India is highly under penetrated and all the listed companies in the space have seen huge interest in recent times. Many companies have raised funds through stake sale via offer for sale and they have got lapped up on the bourses. Ayushman Bharat has shown the impact of affordable insurance for the people and the healthcare sector. This is also a key indicator for the expected growth in the insurance sector particularly life where even protection is abysmally at low levels.

PSU stocks have shown interest by investors and many of the companies have seen their stock prices move up buoyed by the performance of IRCTC on listing on 14th October. Shares of IRCTC which were issued at Rs 320 closed at Rs 899.40 a gain of Rs 579.40 or 181%. The proposed divestment of BPCL by way of a strategic sale is expected to rerate the industry. It would also largely meet the divestment target for the year. One hears talk on the streets that the deal could happen any time soon and one should not be surprised if the announcement happens in November itself.

Thursday the 31st of October sees October futures expire. The current value of NIFTY at 11,583.90 points is marginally higher than the series open by a mere 12.70 points or 0.11%. With three trading days to go the series could go in either direction but I believe that the bulls have an edge with the new Samvat backing them.

The mood on the street is changing from pessimistic to neutral with a positive bias. This itself is a huge shift. With ground reality likely to improve in the coming months and two quarters, things should be even better.

The strategy in the coming two quarters remaining in Financial year 2019-20, would be to build on one’s portfolio using any dips that come one’s way.

Wishing all a happy Diwali and prosperous Samvat 2076.

The week gone by was a great one for the markets as they gained on all five trading days of the week. This has not happened in a fairly long time while the converse of them losing on all five days has been happening. Probably the mood for Diwali is being set. IRCTC listing on Monday launched the week.

BSESENSEX gained 1,171.30 points or 3.07% to close at 39,298.38 points. NIFTY gained 356.80 points or 3.16% to close at 11,661.85 points. The broader indices saw BSE100, BSE200 and BSE500 gain 3.45%, 3.58% and 3.55% respectively. BSEMIDCAP was up 4.64% and BSESMALLCAP was up 2.78%. It is after a long time that one saw the market breadth improve significantly. Stocks across sectors have gained.

The top performing sector was BSEAUTO which gained 7.88% while the worst performing was BSE IT which lost 0.08%. The top gainer in individual stocks was Yes Bank which has been on a downward trend from March 2019 from a level of Rs 285 to Rs 29 in October 2019. The stock gained 29.80% to close at Rs 51.40.

I have been a very strong advocate of PSU stocks and have been writing about them regularly in my articles. Have been advocating holding them in one’s portfolio. The two PSU ETF’s had a stellar performance for the week. Units of Bharat 22 the ETF managed by ICICI were allotted at Rs 33.68 in the recent FFO. They have gained Rs 1.52 since the allotment. The gain during the week was Rs 1.35 or 3.99%. CPSE ETF gained Rs 1.60 or 6.93% during the week to close at Rs 24.69. The fundamentals of PSU stocks are without doubt and the moment fresh supply stops, they gain.

Shares of IRCTC listed on Monday and made stellar gains on expected lines. Shares were issued at Rs 320 and they closed on debut day at Rs 728.60, a gain of Rs 408.60 or 127.69%. Delivery on day one was 154.11 lac shares which was 76.44% of the IPO size of 201.6 cr shares. Shares of IRCTC gained further during the week and closed at Rs 779.20. This is the best performance by any PSU stock on debut day ever and probably would rank as the top three in all stocks.

The other IPO to list was from Vishwaraj Sugar Industries Limited which closed with gains of 50 paisa at Rs 60.50 against the IPO price of Rs 60.

Dow Jones gained 32.36 points or 0.17% to close at 26,847.95 points. The Indian Rupee lost 12 paisa or 0.17% to close at Rs 71.14 to the US Dollar.

Corporate results seem to be doing well but they should be factored in after taking cognizance of the lower tax to be paid as a result of the change in corporate taxes announced by the Finance Minister. In the quarterly results for the period July to September 2019, the tax rate gets skewed as the benefit of the lower tax rate appears to be significantly higher as the benefit of the previous quarter tax rate is adjusted.

Markets begin with a trading holiday on Monday on account of state elections in Maharashtra and Haryana. Both the exchanges are located in Mumbai and hence the holiday becomes mandatory. The mood seems to be changing, though slowly. The penchant to short the market has not yet gone and the markets still have its bogey stocks which continue to be under selling pressure. The rebound in Yes Bank is one such example.

There is expectation that the income tax rate cut for individuals is expected any day and was delayed on account of the model code of conduct on account of state elections being announced kicking in. With elections over on Monday, this announcement could happen any day soon and be a Diwali bonus to the citizens. This could help change the mood further in the market place.

Muhurat trading for Samvat 2076 will be held on Sunday the 27th of October.

With the breadth in the market improving and corporate results improving on account of the tax cut in corporate tax, things are looking brighter. The cleansing of the system where corrupt corporates have been booked and brought to task is painful in the short term but indicates the mindset of the government and the resolve to cleans the system. Markets are likely to maintain their upward stance and with FPI’s having stopped their selling spree, things would get better going forward. Look for value to add to your positions in the markets. While there would be corrections on and off, the continuous downtrend looks to be a thing of the past.

Happy Diwali.