Markets in the week gone by were volatile and choppy. Traders and investors were shaken looking at the intraday volatility, where markets opened positive and then turned negative and vice versa. At the end of the week, they gained on four of the five trading sessions and lost on one. The net change saw BSESENSEX gain 188.51 points or 0.26% to close at 72,831.94 points while NIFTY gained 73.40 points or 0.33% to close at 22,096.75 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.57%, 0.73% and .84% respectively. BSDEMIDCAP gained 1.44% while BSESMALLCAP was up 1.81%.
A sample of the volatility is given below where BSESENSEX gained 105 points on Monday, 89 points on Wednesday, 540 points on Thursday and 190 points on Friday. It lost 736 points on Tuesday. This brings us to total gains on five days of 924 points and a loss of 736 points. Against this, the daily swing which is the difference between the intraday high and low was much higher. On Monday it was 671 points, Tuesday was 557 points, Wednesday it was 728 points, Thursday it was 466 points and on Friday it was 943 points. Total intra week volatility was at 3.365 points against a net change of a mere 188 points. This clearly shows that markets seem to have lost the trend and are drifting in either direction, which is indicative of even sharper moves in the coming time.
The Indian Rupee lost 54 paisa or 0.65% to close at Rs 83.42 to the US Dollar. Dow Jones gained on four of the five sessions and lost on one on Friday. At the end of the week, Dow Jones gained 761.13 points or 1.97% to close at 39,475.90 points. The US FED in its meeting kept interest rates unchanged in a band of 5.25% to 5.50%. This is the fifth straight time that interest rates have been kept unchanged. Post the meeting, indications remain strong that there will be three rate cuts later in the year, an expected event which is not allowing markets to fall in the US. On Thursday and Friday some of the IT giants issued profit warnings which caused the Dow to dip sharply on the back of the IT stocks.
In India too we had the repercussions and the IT sector was under tremendous pressure. It was the biggest weekly loser and was down 5.54%. Stocks like Infosys were down 7.71% and TCS lost 7.22%.
In primary market news we had one listing during the week and as far as the main board is concerned, curtains have been drawn for the financial year 2023-2024. There are no more issues for the year and a couple of issues are expected in the first week of April 24. There was one listing during the week when shares of Krystal Integrated Services Limited listed on the bourses on Thursday, the 21st of March. The company had issued shares at Rs 715. The listing price was at Rs 795, and the low of the day was at Rs 703.05. The share closed day one at Rs 712.30, a loss of Rs 2.70 or 0.37%. It lost marginally more on Friday and closed at Rs 710.40, a loss of Rs 4.60 or 0.64%.
The week ahead is a very short and truncated week with a mere three days of working. There are trading holidays on Monday and Friday and this would mean that the futures would expire on Thursday the 28th of March, which would also be the last trading day of the year. The current value of NIFTY is at 22,096.75 points which is a mere 113.95 points or 0.52% higher than the March series open at 21,982.80 points. With three trading sessions to go, and such a volatile market, the series is clearly up for grabs and can go in any direction. If the bulls slip up, they could see the series being lost in next to no time. Expect markets to be super volatile over the next three days which would culminate in the end of the series as well.
Markets were under pressure and for a brief period of time seemed to have broken crucial supports at 21,825 points on NIFTY. The lows made were at 21,710 points on NIFTY and at 71,674 points at BSESENSEX. These levels would act as support if there is any further weakness in the markets going forward. Further, the next level of support would be at 21,500 points on NIFTY and at 71,100 points on BSESENSEX.
The strategy for the short three-day week would be to remain light and ensure that no major exposure remains when trading ends for the week, month and year on Thursday, the 28th of March. Use rallies to sell and look at sharp dips to buy in the large cap space only. The current concern about midcap and small cap space remains as of now. In short, its time over the next three days, not to be adventurous as the financial year 2023-2024 has been a good one for traders and investors in India. Hold on to your profits and don’t squander it away over the next three days, even if the offer looks too tempting.
Trade cautiously.

The week gone by was extremely volatile and choppy. We began with a correction. Then a corrective up move, followed by a sharp correction, yet another corrective up move and then yet another correction. Though markets gained on two of the five trading sessions and lost on three, the intensity of the fall has shaken the markets. It appears the momentum is lost and probably enough signals are available to indicate some more correction in the coming week. 

One normally associates Friday the 13th as an ill-omen. This time we had a double whammy where markets fell sharply on the 13th and then fell again the following Friday, the 15th of March. So, in short the 13th and Friday individually hit the markets quite sharply. BSESENSEX lost 1,475.96 points or 1.99% to close at 72,643.43 points while NIFTY lost 470.20 points or 2.09% to close at 22,023.35 points. The broader markets saw BSE100, BSE200 and BSE500 lose 2.35%, 2.60% and 2.94% respectively. There was worse to follow in BSEMIDCAP which lost 4.02% and BSESMALLCAP which was down 5.91%. Very clearly the beating in midcap and small cap was quite severe. 

The Indian Rupee lost 14 paisa or 0.17% to close at Rs 82.88 to the US Dollar. Dow Jones lost on two of the five sessions and gained on three. It closed virtually flat, down 8.38 points or 0.02% to close at 38,714.77 points. What is becoming worrisome in the US is once again inflation, and with present levels, it appears that the rate cut would just get postponed. 

Elections to the Lok Sabha have been announced and they will be held in seven phases beginning with the first phase being held on 19th April.  The remaining would be held on 26th April, 7th May, 13th May, 20th May, 25th May and 1st June. Counting would be held on the 4th of June. With the poll notification being done, the code of conduct is applicable with immediate effect and one would see political parties get to work on the business end of the elections. 

Primary markets saw a lot of activity in the week gone by. We had three listings of equity and one of a road Invit, one other issue which saw its issue open and close for subscription, and one other issue which had opened for subscription but would close on Monday. 

The first share to list was from R K Swamy who had issued shares at Rs 288. The listing price was at Rs 252, a discount of Rs 36 or 12.5%. After a volatile day where the high and low was Rs 284.50 and Rs 248, the share closed debut day at Rs 263.25, a loss of Rs 24.75 or 8.59%. By the end of the week, the share recovered to close at Rs 279.40, a loss of Rs 8.60 or 2.99%. 

The other listing on Tuesday was from Bharat Invit, which had allotted units at Rs 100. The unit debuted at Rs 101.10 and closed on debut day at Rs 103.05, a gain of Rs 3.05 or 3.05%.  This instrument has some unique features as all the underlying assets are of ‘HAM’ projects where there is no risk of toll collections. Second, the income and expense of the trust is linked to a floating rate of interest which makes the yield insulated from rate fluctuations. The Invit closed on Friday at Rs 103.40 a gain of Rs 3.40 or 3.40%. 

The second listing was from J G Chemicals Limited which listed on Wednesday and had a tepid listing. The debut price was Rs 211, for the company which had issued shares at Rs 221. The loss was Rs 10 or 4.52%. The share closed day one with further losses at Rs 184.80, a loss of Rs 36.20 or 16.38%. It regained some ground over the next two days and closed Friday at Rs 194.85, a loss of Rs 26.15 or 11.83%. 

The third listing was from Gopal Snacks Limited which happened on Thursday, the 14th of March. The company had issued shares at Rs 401, and the share debuted at Rs 350, a loss of Rs 51. By the end of the day, the share gained some ground and closed at Rs 360.05, a loss of Rs 40.95 or 10.21%. On Friday, the share recovered some ground and closed at Rs 378.70, a loss of Rs 22.30 or 5.56%. 

The issue from Popular Vehicles and Services Limited, a 2-wheeler, 3-wheeler, 4-wheeler and commercial vehicles distributor from Sotuh India tapped the capital markets with its fresh issue of Rs 250 crores and an offer for sale of 1,19,17,075 equity shares in a price band of Rs 280-295. The issue had a tough time and managed to get subscribed on the basis of response from QIBs. The issue was subscribed 1.24 times overall with QIB portion subscribed 1.92 times, HNI undersubscribed at 0.67 times and Retail portion subscribed 1.07 times. There were 1.35 lakh applications. 

The issue from Krystal Integrated Services Limited opened on Thursday, the 14th of March and would close on Monday the 18th of March. The issue consists of a fresh issue of Rs 175 crores and an offer for sale of 17.50 lakh shares in a price band of Rs 680-715. At the end of the second day of bidding, the issue was subscribed 0.72 times with QIB portion subscribed 0.57 times, HNI portion subscribed 1.19 times and Retail portion subscribed 0.6 times. There were 32,989 applications till the end of day two. 

Primary markets on the main board seem to have reached a level from where they are headed downhill. Performance of newly listed shares is not making money for investors who are allotted shares. Subscription levels have dropped significantly and when issue after issue lists and trades at a discount, it’s time that merchant bankers and promoters take a hard look at their asking price. While one may always argue that investment in primary issues is not about first day exit, but that is what it has all become about. More than 50% of investors on day one change hands and it’s only the new set of investors who join on day one, who have any sort of holding period in the company going forward. If sanity does not come in sooner than later, we would again see a large period of lull where there are no issues tapping the main board. 

The week ahead would be choppy and volatile and would trade with a negative bias. The movement over the previous week has seen markets getting shaken and losing momentum. While the bounce on Thursday made people believe that the worst is over, the fall on Friday has caused concern once again. It makes sense to lighten one’s exposure in the markets as we approach the end of the financial year 2023-2024 and enter the election period as well. While there are multiple resistances between the current levels of the indices on the way upward till the top of 74,245 points on BSESENSEX and 22,526 points on NIFTY, we have just one support on the downside around 21,825-21,860 points on NIFTY. Last Wednesday we touched a level of 21,905 points before we bounced on Thursday. The safety factor is not too big. If this were to break we would have a newer target of around 21,450-500 points which could cause a sharp correction in next to no time. 

The strategy for the week ahead would be to remain in large cap stocks and use any rallies in the market to sell midcap and small cap stocks. There would be no policy statements going forward as the poll notification has happened and results for the 4th quarter and year ended March 24 are roughly four weeks away. Brace for a volatile week and use rallies to sell and only sharp dips to do select purchases in the large cap space. 

Trade cautiously.