The short four-day trading week which had a holiday on Thursday for Holi saw markets gain on the first three days. Friday began positively, but profit taking set in and the day closed with substantial losses. The week however ended with gains but the sentiment has turned negative. The expected correction which I had talked about happening latest by Wednesday happened, but on Friday.
The BSESENSEX gained 140.29 points or 0.37% to close at 38,164.61 points. NIFTY was up 30.05 points or 0.26% to close at 11,456.90 points. The broader indices manged to close in the green and BSE100, BSE200 and BSE500 were up 0.09%, 0.10% and 0.04% respectively. As mentioned earlier while BSESENSEX ended with gains of 140 points for the week, it lost 400 points from the intra-day high on Friday. Net loss on Friday was 222 points on the BSESENSEX. Similarly, NIFTY lost 116 points from the intra-day high while the days loss was 54 points. The point being emphasised is the sharp correction that happened on Friday.
In the week ahead March futures expires on Thursday the 28th of March. The current value of NIFTY implies a series gain of 664.60 points or 6.16%. The lead that bulls have is too big for the bears to make any serious challenge to them. There would however be some more softening in the market before the series expires in four days. A point to be noted is that the financial year ends in this week with the last day of trade for the equity segment being Wednesday the 27th of March and derivatives being expiry day. It would therefore be appropriate that the market trades softer in the initial part of the week and then picks up momentum.
Dow Jones was under a lot of pressure on Friday and lost ground. On a weekly basis it was down 346.55 points or 1.34% to close at 25,502.32 points. FII’s have continued their buying and bought on all four trading days. Their average purchase is in the range of 2200-2500 crs on a daily basis. With this kind of support and no apparent negativity on the election front as of now, markets are poised to trend upwards. They are on course to make new life-time highs in April.
Jet Airways resolution seems to be going nowhere and I believe DGCA the regulator needs to step in to alleviate the problems on passengers. If a passenger cancels a ticket, he is levied a fee which could be as high as Rs 4,500 and if Jet cancels the flight, he has to just refund the fare. To add insult to injury, Jet can cancel the flight even 72 hours before the flight time. Where does the passenger go? DGCA needs to look at the charter of passengers it had announced some time back and take care of this extraordinary event where Jet is now operating just a third of its flights and they also likely to reduce with each passing day. In a lighter note, someone had remarked that it is not Jet Airways but Jet Roadways.
The issue from MSTC was finally subscribed after being extended for three days. The issue was subscribed 1.46 times with QIB portion subscribed 1.12 times, HNI 2.15 times and Retail 2.95 times. The other issue during the week which was the first of its kind ‘REIT’, Real estate investment trust from Embassy Office Parks was subscribed 2.58 times with Institutional portion subscribed 2.15 times and non-institutional portion subscribed 3.10 times.
The government has crossed their divestment target of Rs 80,000 crs and received over Rs 85,000 crs. This is the second year in a row when the target has been reached. The CPSE ETF has received record subscription and the same was oversubscribed many times over. The government has a green shoe option and final figured would be known only on Monday. The figure being talked about is over Rs 20,000 crs.
Markets are likely to open lower and trade lower in the earlier part of the week into expiry. Closer to expiry or maybe even after that on Friday they would have resumed their upward journey. The strategy would be to buy into dips.
