Markets continued their upward movement and registered yet another 52 week high on the benchmark indices. The BSESENSEX gained 424.22 points or 1.49% to close at 28,892.97 points while NIFTY gained 117.80 points or 1.34% to close at 8,939.50 points. February futures expired with gains of 336.75 points or 3.91% at 8,939.50 points.
Markets are less than 2% away from their all-time highs and the momentum seems to be with the bulls. The next big trigger is the results to assembly elections in five states including India’s most populous state Uttar Pradesh which has 403 assembly seats. The elections are being fought tooth and nail and almost all parties are fighting for broke.
In the recently held elections in 10 municipalities and local bodies in Maharashtra, BJP has come out ahead of all its rivals winning in eight municipalities. The only one which Shiv Sena won was in Thane and in Mumbai it is a neck to neck race between the two former allies. Currently ego is coming between selecting the mayor and all sorts of combinations are being looked at. If SS decides to have its mayor backed from within or outside by Congress, it would have immediate ramifications in UP where two rounds of polls are yet to be held. SS is a Hindutva party and Congress going with a non-secular and non-Muslim party would not go down with its alliance with Samajwadi party. Very clearly they would like to keep the issue dangling till elections are completed in UP. On the flip side the performance of BJP would have a rub-off effect in UP as a substantial UP migrant work force is in the city.
Markets seem to be in a mood to test the all-time highs in the run up to the election results which are due in a fortnight from now on the 11th of March. While a strong performance by BJP would be reason to extend the rally and then see profit taking, a poor performance would be a good enough reason for a gap down opening when markets open after Holi. The die is cast and the stage set for an interesting two weeks from now on.
Primary markets are buoyant and would add to the activity of the secondary market. The week ahead would see two IPO’s having their road shows. The first would be Music Broadcast which owns Radio City or FM Channel 91.1 and would have a fresh issue of Rs 400 crs and an offer for sale of 26.58 lakh shares. The Dainik Jagran group owns Music Broadcast.
The second issue is from market tycoon Radhakishan Damani promoted Aveue Supermarts Limited which would be raising Rs 1,870 crs through a fresh issue. There is lot of buzz about the issue and the same is commanding a premium of about 60% on the expected price band.
Primary markets and the expected build-up into the election results would set the stage for the markets hereon. Enjoy the rally for the first six or seven days if you do not want to see wild movements. Trade cautiously thereafter.
