The week had three trading sessions and an hour of auspicious Muhurat trading in the week gone by. The BSESENSEX ended the week with gains of 146.90 points or 0.42% to close at 35,158.55 points. NIFTY gained 32.20 points or 0.31% to end at 10,585.20 points.

Dow had a strong showing and gained 718.47 points or 2.84% to close at 25,959.30 points. The Indian Rupee closed unchanged at Rs 72.49 to the US Dollar. US Fed in their meeting last week decided to keep interest rates unchanged in the 2-2.25% range. The street very strongly believes that in the next meeting to be held in December18 there would be an increase of 25 basis points. In the mid-term elections in the US, Democrats took control of the House after eight years while Republicans continue to rule the Senate. The loss of the house could see Trump being brought to check but could also be used as the Democrats being termed as ‘obstructionists.

Trading for Samvat 2075 began on a very promising note with BSESENSEX gaining 245.77 points or 0.70% to close at 35,237.68 points. NIFTY gained 68.40 points or 0.65% to close at 10,598.40 points. If one talks of Samvat 2074 it wasn’t that good. BSESESEX began trading at 32,389 points on 17th October 2017. It made a high of 36,443.98 points on 29th January 2018 and then slipped all the way to almost where it all began to 32,483 points on 23rd March 2018. From there we had a strong sustained rally to 38,989.65 points on 29th of August. It was downhill again and a late recovery over the last 10 days saw the BSESENSEX close at 34,991.91 points, a gain of 2,601.95 points or 8.03%.

NIFTY similarly began at 10,234.45 points, made a January high of 11,171.53 points and then fell to 9,951.90 points in March. The high in August was 11,760.20 points. The closing of NIFTY as of 6th November, the last trading day of the previous Samvat was 10,530 points, a gain of 295.55 points or 2.88%.

Other benchmark indices ended in the red with BSEMIDCAP down 1,386.41 points or 8.60% down. BSESMALLCAP lost 2,650.7 points or 15.53% and Bank NIFTY was down 952.40 points or 3.86%. While BSESENSEX gained and NIFTY was also positive, others were negative. Huge volatility during the year saw traders benefiting but long-term investors did not. It was a tough year and one that people would like to forget in a hurry.

Crude oil prices have fallen below the 70-dollar mark, a level last seen in April 2018. With the rupee also stabilising and inching up, its good news for the country and the government.

Many commercial-papers are due for repayment/rollover on Wednesday the 14th of November. If everything goes as planned one is likely to see a re-rating of the better placed NBFC’s in the coming week. This sector would see volatile movement. A point to remember is that the results of the current quarter would be affected post the tightening that took place in September.

Markets recovered from their lows in the last week of October and seem to be stabilising currently. Results for the quarter July-September are showing signs of India Inc reviving and recovering. While it is not full throttle ahead yet, there are enough green shoots visible and several companies are posting positive numbers. This gives hope that the current quarter could be even better. With a substantial drop in prices over the last few months valuations could catch up. On the one hand you would have better earnings and on the other side lower prices making it attractive to invest.

Markets are likely to continue to remain volatile as results season ends this week. In four weeks from now elections and the results to five states would be known on 11th December. Expect volatility and two-sided movement into this event. From here onwards markets should settle down to a recovery into the general elections due in April-May 2019.

Trade cautiously.

It was a great week at Dalal Street and it appeared that the bulls decided to have Diwali celebrations a week earlier. There were gains on three of the five trading days, one day of correction and one day of a flat market. The gains on the BSESENSEX were 1,662.39 points or 4.98% at 35,011.65 points. NIFTY gained 523 points or 5.21% to close at 10,553 points. This is the best weekly performance in a long time and certainly the best in 2018. The broader markets saw the BSE100, BSE200 and BSE500 gain 5.45%, 5.59% and 5.69% respectively. BSEMIDCAP gained 7.34% and BSESMALLCAP was up 6.38%.

The Indian Rupee had a good showing and gained 97 paisa or 1.32% to close at Rs 72.49. Dow Jones gained 582.52 points or 2.36% to close at 25,270.83 points. Crude oil too softened and all in all it was a great week for India where the markets went up, rupee appreciated, and crude oil price softened.

Sanctions against Iran kick in from this week, but some exemptions have been given to eight countries including India. It appears that India would pay for Iranian crude oil in rupee terms through Uco Bank which does not have any international branches and therefore has no risk of sanctions.

The NBFC crisis would get resolved to a great part once the 14th of November passes with a very large number of CP’s (commercial papers) due for payment or roll over. Once all the NBFC’s have paid or successfully rolled over the current crisis in the stock markets would be averted and things would start moving to business as usual.

The SFB crisis of last week has been partially resolved with Equitas holdings announcing that they would dilute by creating a separate company in which the SFB or small finance bank is housed and then move to creating a merger of the two entities. Readers would recall this issue as being highlighted by e even at the roadshows of the concerned companies. While one has announced its decision the other company Ujjivan Finance is yet to announce their course of action, but it must be on similar lines. RBI is the boss and there are no two ways about it as far as SFB’s, NBFC’s or banks are concerned.

The week ahead sees Diwali and there would be ‘Muhurat Trading for an hour on Wednesday the 7th of November between 5.30 pm to 6.30 pm. Thursday would be a holiday and therefore one is likely to see profit taking on Tuesday in the second half of trading. What happens on Friday would depend on events in the US with China trade wars and elections due on Tuesday the 6th of November, where the Democrats are expected to fare better and cause problems for the Republicans.

The week has been good with relief and joy on markets, crude and the rupee and it has come at the right moment. Markets will look to build on these gains and with corporate results providing some help should be able to do so. While markets will be choppy and the gains going forward not as sharp expect markets in the near short term to trade with a positive bias.

Wishing all readers a Happy Diwali and Prosperous New Year Samvat 2075.