The Week gone by began with a trading holiday on Monday. Coincidentally India and the US both were closed on that day. There was a joke in Mumbai that the holiday was to immerse Lord Ganesh, but Mumbai got immersed instead. Trading began on Tuesday on an extremely weak note. The merger of PSU banks probably did not go down well with the markets or they expected more than just this. Either way Tuesday was really weak. The remaining three days saw the market alternating between gains and losses. Come Friday, there were again expectations of yet another press conference and markets gained with BSESENSEX up 337 points and NIFTY up 96 points.

BSESENSEX lost 351.02 points or 0.94% to close at 36,981.77 points while NIFTY lost 77.05 points or 0.70% to close at 10,946.20 points. The broader market saw BSE100, BSE200 and BSE500 lose 0.77%, 0.76% and 0.68% respectively. BSEMIDCAP was down 0.76% while BSESMALLCAP was up 0.48%.

Dow Jones gained 480.64 points or 1.83% to close at 26,797.46 points. The Indian Rupee was under pressure and lost 32 paisa or 0.45% to close at Rs 71.72 to the dollar.

India Mangalyaan -II continues to orbit the moon and it appears it has the necessary fuel to do so for about seven years against the earlier one year talked about. The lander ‘Vikram” lost contact with the mother ship and space control when it was 2.1 km from the moon’s surface. While all efforts are being made to revive contact and find out what went wrong, the fact that India could do so in its maiden attempt is itself a super achievement and puts the country in the top super league of nations having such capability. The lander has been located and pictures of the same have been received from the orbiter, however contact is yet to be made. ISRO has another 13 days to do so as than it would be night on the moon and remain so for the next 14 days. Seeing the achievement, the day when we would have an Indian on the moon’s surface is certainly not far. Another important point to remember is that this mission has been done at a fraction of a cost of what other countries have spent. The India mission was under Rs 1,000 crs while others have spent between Rs 19,000-20,000 crs. This also was a more complex mission as it involves an orbiter and a lander with a rover.

The government has announced the setting up of a task force that would identify infrastructure projects which are technically feasible and financially/economically viable and can be initiated in 2019-2020. The minimum size would be Rs 100 crs and the target is to achieve investment of Rs one lac crs in such projects by 2024-2025. This would help India get closer to its target of becoming a five trillion economy by the end of 2024-2025. More importantly such a massive drive would also ensure consumption, demand and job opportunities. This would kick-start the economy and help revive demand in many sectors as well. Once projects are announced it would impact steel and cement followed by a host of other sectors.

Auto sector is seeing one of its worst slowdowns in recent decades. Market men and industry watchers expect that GST would be cut to boost demand. The Finance Minister has made it quite clear that it is for the council to take a call on the same as GST affects states and centre both. It can only happen if the majority of members of the council agree. This could be a tough order simply because manufacturing of automobiles is confined to a handful of states while consumption is across all states. Many manufacturers have started offering vehicles with BS -VI norms to beat the deferment of purchases. While BS -VI vehicles are expected to be more expensive they are currently being offered at par to the BS -IV vehicles.

Market will have plenty of news flow particularly its expectation of measures to revive the economy from the centre. First there would be expectation of a press conference, then the agenda of the conference concerning a particular sector or group of sectors and then the actual announcement. These expectations will keep the market on tenterhooks before the quarterly results for the period July to September start kicking in in four weeks’ time. It would be important to see which sectors in general and companies in particular have been able to withstand nature’s fury of raining with a vengeance. We had a delayed monsoon and then large parts of the country had unprecedented floods. The next press conference is likely to see measures concerning the real estate sector being addressed.

Markets in the week ahead will hope that the US China trade talks take shape and result in some positive outcome. It’s now getting close to one year since the dispute began. The BSESENSEX has good support at the low of 36,102.35 points made on 23rd of August, followed by a higher bottom at 36,409.54 points on 4th of September. Similar levels on NIFTY were at 10,637.15 points on 23rd August and 10,746.35 points on 4th September. If these levels continue to hold in the next 10 days or so, we should be well on our way to recovery in the immediate term. Secondly even if FPI’s discontinue their selling spree things should be fine. So, we have three positive possibilities to look for in the coming weeks. Let’s hope for the best.

The week gone by began trading on a very strong note and markets were up for the first two days, followed by profit taking and August futures expiry over the next two. Friday was another classic day and followed the previous Friday’s pattern. Markets opened strong, turned negative and then had a very strong rally to close positive for the day. BSESENSEX ended the week with gains of 631.63 points or 1.72% to close at 37,332.79 points. NIFTY gained 193.90 points or 1.79% to close at 11,023.25 points. The broader indices saw BSE100, BSE200 and BSE500 gain 2.06%, 2.11% and 2.16% respectively. BSEMIDCAP was up 2.01% while BSESMALLCAP gained 2.16%.

It would be interesting to note that the low made on Friday was 36,829.81 points on BSESENSEX and 10,874.80 points on NIFTY. These lows were higher than the close made on Friday the 23rd of August. Also, the rally from intraday low on Friday to close on Friday was over 500 points on the BSESENSEX and almost 150 points on NIFTY. Significantly, markets were marginally positive on a weekly basis at the low of Friday and then rallied on announcement of the press conference by the FM in the evening. This was similar to the previous Friday as well.

Nifty futures for August expired on a negative note and were down 303.85 points or 2.70% to close at 10,948.30 points. Dow Jones had a volatile week and gained 687.92 points or 2.68% to close at 26,316.82 points. Trump tweets about China trade war continued to keep the US markets on its toes. The Indian Rupee gained 26 paisa or 0.36% to close at Rs 71.40 to the US Dollar.

Friday evening saw the FM announcing steps about the PSU banking space. Ten banks would be merged into 4 entities. These would be Oriental Bank and United Bank merging into Punjab National Bank, Syndicate Bank merging into Canara Bank, Andhra Bank and Corporation Bank merging into Union Bank of India and Allahabad Bank merging into Indian Bank. With the earlier merger of Dena Bank and Vijaya Bank into Bank of Baroda has already fructified, the number of PSU banks with this round would shrink by six. The FM also announced that an approximate amount of Rs 55,250 crs would be infused into the PSU banks in the current year.

C G Power board sacked its Chairman, Gautam Thapar in lieu of recent developments of wrong doing in the company. A day later the CFO of the company was terminated on grave nature of the misconduct and breach of trust and having knowingly undertaken actions which were detrimental to the interests of the company and its stakeholders. Company after company in the Gautam Thapar group is either being sold or is sinking and it appears, he has no interest in the legacy built by his forefathers.

Earlier during the week, the government announced several measures which would help in reviving manufacturing and economic activity in the country by revising FDI rules. The government allowed 100% FDI in single brand retail, coal mining, contract manufacturing and digital media.

GDP for the quarter April to June 2019 was at 5%, its slowest level of growth since 2013. There is concern and hence the measures being taken to revive demand and kickstart growth.

The FM has made two sets of announcements on consecutive Fridays and has helped in keeping the markets positive. Will the third announcement expected about the realty sector in the coming week be again on a Friday and have a similar impact?

The week ahead has a trading holiday on Monday on account of Ganesh Chaturthi, the day Lord Ganesh idols are brought home. Markets would be choppy and take cues from the global markets where there seems to be no concrete resolution happening anytime soon on the trade wars. India will also look at the auto numbers which are certainly not going to be encouraging. Further the measures on the real estate sector would be certainly very keenly watched.

Play the market as it unfolds in the four-day week ahead. Announcements from the FM would be very keenly watched and tracked. While markets would be choppy, carrying short positions forward may be a dangerous thing, as there is every possibility that FPI’s may revert to their buying ways in the immediate near future.