Markets were volatile and choppy in the short four-day week with a mid-week holiday on Wednesday for Independence Day. While the net weekly change was small, each day saw net movement of 200 points or thereabouts on the BSESENSEX, beginning with losses on Monday and gains on subsequent Tuesday. The same pattern was repeated on Thursday and Friday. The net change was a gain of 78.65 points or 0.21% with the BSESENSEX closing at 37,947.88 points. NIFTY gained 41.25 points or 0.36% to close at 11,470.75 points. Markets did not make new highs this week.

In primary market news. The IPO from Credit Access Grameen Limited, the microfinance company would be listing on Thursday the 23rd of August.

In news the former Prime Minister of India Atal Behari Vajpayee passed away at the age of 93. He was the first non-congress PM to complete his 5-year term. In corporate news the CFO of Infosys, Ranganath has quit after putting in 18 years at the company. He was the CFO since Bansal had quit in 2015. Probably things are not as hunky dory as one may have expected ever after the stink raised by former promoters of Infosys after the Panaya acquisition. Things at Infosys have not been the same after the induction and subsequent parting of Vishal Sikka. There has been a constant spate of resignations and the spat between the former promoters and management. One simply wonders when things would be sorted out.

The week ahead has a similar trading holiday on Wednesday and would be divided into two distinct halves. Volatility would continue to hurt the markets and a serious attempt would be made to make new highs on the benchmark indices. The new highs are less than a day’s gain away with the difference of 125 points on the BSESENSEX and 25 points on the NIFTY. While the distance is literally a stone’s throw away it could take some time to get there as neither the bull nor the bear would like to give way. This is what could lead to volatility and markets would react to any news and market performance of Dow Jones.

I have been able to anticipate the market movements over the last 6-8 weeks and the same can be reflected in the weekly calls. The July rally that unfolded was well called and is now behind us. Going forward the bull rally will end only on euphoria and that is to happen shortly. It’s during this euphoria that greed will take over and a sharp correction would unfold. The time available is under 12-15 trading days. How this would unfold is a little hazy.

Simple advice – Stick to quality, book profits and keep your ammunition dry, it will be very handy when markets correct sharply.

The week gone by saw the BSESENSEX register new highs and gain further ground. It was up 313.07 points or 0.83% up at 37,869.23 points. NIFTY gained 68.70 points or 0.60% to close at 11,429.50 points. During the week the intra-day highs were 38,076.20 points on the BSESENSEX and 11,495.20 on NIFTY. Both are lifetime highs and seem to be being made even though geo political and global cues are not the best.

Dow had a weak showing and was down 149.44 points or 0.59%. Turkey is the latest in the firing line of the US and is in the thick of a financial and currency crisis. They were a strong ally of the USA and what they have done could be a warning to many others. The Turkish Lira has lost a third of its value to the US Dollar in about a year’s time.

The week is a short time and many unexpected developments are taking place place. Some ten days ago Jet Airways was in the news about not having enough cash and asking its crew to take a pay cut of about 25%. Now in a completely surprise development Jet Airways deferred its results on the day they were to be declared. Yet another news, the Deputy Managing Director of HDFC Bank, Paresh Sukhthankar has quit. He was there since the inception of the bank. One wonders what transpired with Aditya Puri due for retirement in 2020. Mr Sukhthankar was widely believed to succeed Mr Puri. Strange indeed but speculation that he is joining Axis Bank is being talked about.

SEBI has asked the holding company of Vakrangee Limited to make an open offer for violation of the 25% holding rule. The open offer would have to be at the price prevailing in June 2013 and would include interest at 10% to those shareholders who held shares at that time and continue to hold shares even today. While many of the original shareholders may not be there as the price moved from Rs 30 to Rs 515 and is now currently at Rs 63, the order was well overdue. Rough estimates say that the open offer price would be around the Rs 170 mark and one could be sure that investors would be more than willing to tender, in case the open offer is made. Knowing the promoter group, one could be sure that they would contest the same and go to the tribunal for appeal rather than make the open offer. This open offer mandate would keep trading volumes and interest in the stock at heightened levels.

In primary market news, the IPO from HDFC AMC had a stellar debut and gained 65% on day one. Shares which were issued at Rs 1,100 gained Rs 715, but by weekend they had lost some of the gains and closed at Rs 1,749.30, a gain of Rs 649.30 or 59.03%. This would probably be the best performing share on debut, in the current calendar year registering gains of close to 65%. Bandhan Bank is currently up around 87% from its issue price of Rs 375 at a closing price of Rs 703.

The IPO from microfinance company Credit Access Grameen Limited which had opened and closed during the week was subscribed 2.21 times. The IPO which consisted of a fresh issue and offer for sale saw QIB’s subscribe 5.52 times, HNI undersubscribed at 0.98 times and Retail undersubscribed at 0.88 times. Probably the block buster IPO from HDFC AMC changed people’s expectations and that resulted in poor subscription for the issue.

Markets saw a historical rally in July becoming the 12th consecutive year when such a rally has happened. We also saw the midcaps and small caps finally moving. Next week has a mid-week holiday because of Independence Day. Prime Minister Modi is expected to launch BJP’S election campaign for 2019 general elections. His body language and the text of his speech would be analysed by the market for the final assault on the indices. The rally is getting tired and seems to have run its course. We are in the final stages of the same which is explosive and then leads to sharp sell-offs. When it would start is anybody’s guess but it would happen in August for sure. With such strong conviction it makes sense to book profits and wait for the correction which would be swift and deep.