After the sharp gains witnessed in the previous week, markets were circumspect this time around, but continued to post gains. Markets are at lifetime highs, and in the previous week one saw the market breadth gaining substantially. One reason for the above could be the fact that key portfolios of the cabinet have been retained by the ruling party and there is no significant change in ministers. This implies continuity. Probably that explains why the markets rallied and one saw such huge momentum. Market believes that the policies and thinking of the government in Modi 3.0, would be on similar lines as in the previous stint, even though this is a coalition government.  

Sensex gained on three of the five trading sessions and lost on two, while NIFTY gained on four sessions and lost on one session. BSESENSEX gained 299.41 points or 0.39% to close at 76,992.77 points while NIFTY gained 175.45 points or 0.75% to close at 23,465.60 points. The broader indices like BSE100, BSE200 and BSE500 gained 1.29%, 1.68% and 2.02%. BSEMIDCAP gained 4.41% while BSESMALLCAP was up 5.07%. In the benchmark indices one is seeing a churning of heavyweight stocks. In the previous week the top gainers were FMCG and IT stocks. This week they were under pressure and we saw cement shares rallying. I believe this rotation will continue till the announcement of budget and the onset of Quarter one results for the April to June Quarter. If there is one serious concern in the market, it’s the fact that valuations have run up quite sharply and we have not seen any meaningful improvement in results which indicate solid improvement in earnings growth. 

The Indian Rupee lost some ground and was down 19 paisa or 0.23% to close at Rs 83.56 to the US Dollar. There appears clarity in the US markets that there would be no immediate rate cut and that in the current calendar year there would be just one rate cut. Dow Jones lost 209.83 points or 0.54% to close at 38,589.16 points. Dow gained on just one of the five sessions and lost on four. 

In primary market news, we had one issue which opened and closed for subscription last week. The issue from Le Travenues Technologies Limited was subscribed 98.1 times overall. The QIB portion was subscribed 106.73 times, HNI portion was subscribed 110.25 times and the Retail portion was subscribed 53.95 times. There were 26.75 lakh applications overall. 

In the week ahead, we begin the week with a trading holiday on Monday. This will shorten the week and increase volatility to some extent. There are three issues which are opening in the coming week. The first of the lot is the issue from DEE Development Engineers Limited which is tapping the capital markets with its fresh issue of Rs 325 crores and an offer for sale of 45.82 lakh shares in a price band of Rs 193-203. The company is into the business of piping solutions for the oil and gas sector, chemical sector and super critical and power sector. It also makes structural towers for the wind energy space. It began operations in Haryana and has now expanded operations into Kutch at Gujarat. This place is strategically located with two ports Kandla and Mundra in the vicinity, customers for wind energy having their sites in the vicinity and major steel suppliers being in a 25-kilometer radius. The location helps in reducing costs on account of inward transportation significantly. The expansion happening at Kutch will take about 6-8 months to fructify. I believe the company has a great future and would do well post the commissioning of the new plant. The numbers of the company would reflect improved scale and efficiency for the year ended March 26. Only, if you have an investment horizon of 18 months or more should you invest now. There may always be listing gains looking at the market mood, but otherwise investment is for the medium to long term. 

The second issue is from a NBFC based out of Rajasthan, Akme Fintrade (India) Limited. The company is raising through a fresh issue of 1.1 crore shares in a price band of Rs 114-120. The issue opens on Wednesday the 19th of June and closes on Friday the 21st of June. The NBFC space is crowded and recent issues in this space have not done well. The company and its merchant banker have chosen not to have a roadshow in Mumbai for this issue. Speaks volumes for their confidence in marketing the issue. One wishes them luck. 

The third issue is from Stanley Lifestyles Limited which is tapping the capital markets with its fresh issue of Rs 200 crores and an offer for sale of 91,33,454 shares in a price band of Rs 351-369. The issue opens on Friday the 21st of June and closes on Tuesday the 25th of June. The company is a bespoke manufacturer of super-premium and luxury furniture brands in India. It’s a home-grown brand and a little over half its revenues comes from sofas and recliners. The company crafts its products as per the requirement of its customers and everything’s made to order. The business has been growing and with funds being raised to open more stores, benefits of the same would be available as time passes. The company is into a niche segment where luxury defines markets. Take a measured call as growth in revenues will not be a factor of perpendicular growth.  

Coming to the markets in the week ahead, as mentioned earlier it would be a four day week. Momentum and market breadth are in favor of the bulls and there seems to be no letting go by them as of now. However, the run-up has been fast and other than the sharp one day correction on 4th June, there have been no meaningful corrections as of now. Market corrections come suddenly and without warning. Will it happen this week or the next? Not sure. Keep one ear to the ground and prepare for the same because that could be sharp and meaningful. Until that happens, ride the wave as long as the going is good. 

Simple strategy for the period ahead would be to ensure that you have no overnight exposure as markets could open gap-up or gap-down. This could be dangerous. Trading opportunities would exist galore and provide plenty of trades to be facilitated. Use the opportunities to trade and await the correction when it comes. 

Trade cautiously.

It was an eventful and extremely volatile week where one saw wild gyrations in both directions. At the end of it, it left the weak hearted gasping for breath and waiting to recover their composure. The net price movement does not reflect the extent of wild swings that one saw. The exit polls on Saturday indicated a sweeping majority for the BJP led NDA but final results showed that the BJP fell short of absolute majority by a good 32 seats. With the allies they were able to go past the number of 272 and the Prime Minister along with his cabinet would be sworn in on Sunday the 9th of June for a third term. 

The BSESENSEX gained 2,732.05 points or 3.69% to close at 76,693.36 points while NIFTY gained 759.45 points or 3.37% to close at 23,290.15 points. The broader indices saw BSE100, BSE200 and BSE500 gain 3.50%, 3.12% and 3.17% respectively. BSEMIDCAP was up 2.94% while BSESMALLCAP was up 3.11%. Let us look at the intraweek movements on the benchmark indices. Post exit polls, BSESENSEX gained 2,487 points while NIFTY gained 808 points. On Tuesday post results, markets saw BSESENSEX lose 6,234 points intraday while NIFTY lost 2,057 points. Over the next three days markets saw BSESENSEX gain 6,561 points while NIFTY gained 2,039 points. At the end of it all, the BSESENSEX saw a movement of intraweek 15,282 points while in the case of NIFTY it was 4,904 points. Markets gained on four of the five trading sessions and lost on one. 

Coming to retail investors and what they did in the markets, contrary to perception about them, they were net sellers when markets rose on Monday and big buyers when markets fell on Tuesday. They bought small on Wednesday when markets recovered. The data from the exchanges shows that retail investors bought directly. To this one must add what retail investors put in through SIPs in mutual funds which have now crossed Rs 25,000 crores monthly.  

The rally on Friday post RBI meeting saw auto stocks, FMCG and IT companies stage a super rally. The top sectoral gainers for the week were BSEIT 8.17%, BSEFMCG 6.93% and BSEAUTO 6.78%. The biggest loser was BSEPSU which was down 1.84%. 

RBI in its bi-monthly review meeting kept interest rates unchanged on expected lines. They expect GDP to grow at 7.2% in the year 2025. 

The Indian Rupee gained 9 paisa or 0.11% to close at Rs 83.37 to the US Dollar. Dow Jones gained on three of the five sessions and lost on two. At the end of the week, Dow gained 112.67 points or 0.29% to close at 37,798.99 points. 

In primary market news, Le Travenues Technology Limited, the owners of the online travel company ‘IXIGO’ tap the capital markets. The issue consists of a fresh issue of Rupees 120 crores and an offer for sale of 6,66,77,674 shares in a price band of Rs 88-93. The issue would open on Monday the 10th of June and close on Wednesday the 12th of June. The company is present in all the three verticals such as airline tickets, rail tickets and bus tickets. The company reported an EPS of Rs 0.57 for the year ended March 23. The same has improved significantly to Rs 1.75 for the nine months ended December 23. Revenues for the year ended March 23 were at Rs 517.5 crores which are now in the nine month period at Rs 378.7 crores. Based on the EPS for the full year the PE multiple comes at an exorbitant 154.39-163.16 times. Considering the nine months earnings this is more comparable with its peer set. Looking at the current market mood, investors may apply for the above share. 

Coming to the markets in the week ahead, expect them to remain volatile and witness two-sided moves. While FPIs have not turned bullish on India as yet, they seem to be confused more than bearish as they were till the end of the last month. They, bought on Monday and Friday and sold on the remaining three days. With a new high on intraday basis made on BSESENSEX on Friday and closing basis on both BSESENSEX and NIFTY on Friday, expect markets to rally further in the early part of the week. As government formation and the ensuing budget is likely to be presented in the first fortnight of July, composition of the cabinet and how the government settles down will be the focus of attention. Post new highs in the earlier part of the week, expect markets to witness profit taking and settling down from the new levels it has attained. In terms of support, the levels witnessed on Tuesday at the lower levels of 70,234 and 21,281 points will act as strong supports while we could see levels of 24,000-24,200 on NIFTY and 78,800-79,400 on BSESENSEX as ultimate targets in the near term. 

The strategy for the week would be to allow markets to run their course and resort to profit taking only when the fall starts. It’s not necessary that the upside targets have to be made in this week itself. They could happen when the budget is announced as their would-be various expectations from them this time around. The key mantra to making money would be to trade as volatility and trading opportunities galore would exist. 

Trade cautiously.