It was a tough week for the markets and they began the very first day on a bad note, losing more than 1,200 points on BSESENSEX and just under 400 points on NIFTY. This weak start did not allow the markets to recover during the week with FPIs continuing their relentless selling on the bourses. At the end of the week, in which markets lost on four of the five trading sessions, BSESENSEX lost 1,844.20 points or 2.33% to close at 77,378.91 points. NIFTY lost 573.25 points or 2.39% to close at 23,431.50 points. The broader indices saw BSE100, BSE200 and BSE500 lose 3.26%, 3.60% and 3.96% respectively. BSEMIDCAP lost 5.74% while BSESMALLCAP was down 6.05%. It was a week where the midcap and small cap stocks were under terrific pressure. 

The Indian Rupee lost 20 paisa or 0.23% to close at Rs 85.97 to the US Dollar. Job data released in the US on Friday was very strong and nonfarm payrolls surged by 2,56,000 for the month, up from 2,12,000 in the previous month. This number caused the Dow to fall very sharply and it lost a little over 600 points. This would delay the next US FED rate cut and also the number of rate cuts expected in 2025. To add to the woes of the markets in US, the current bond yields are higher than the interest rates. This is bringing more money to the US than ever before. Dow lost on two of the four trading sessions and gained on two. Dow lost 793.68 points or 1.86% to close at 41,938.45 points. 

In primary market news we saw the listing of Indo Farm Equipment Limited happen on Tuesday the 7th of January. The company had issued shares at Rs 215. The discovered price was Rs 258.40, while the share closed at Rs 272.70 on listing day. By the end of the week the share lost ground and closed at Rs 253.75, a gain of Rs 38.75 or 18.02%. 

Two issues closed during the week. The first was the issue from Standard Glass Lining Technology Limited which had issued shares at Rs 140. The issue was subscribed 186.11 times overall with QIB portion subscribed 327.76 times, HNI portion subscribed 275.74 times and Retail portion subscribed 66.74 times. The issue would be listing on Monday the 13th of January. 

The second issue was from Quadrant Future Tek Limited which had issued shares at Rs 290. The issue was subscribed 196.84 times with QIB portion subscribed 139.77 times, HNI portion subscribed 268.61 times and Retail portion subscribed 260.41 times. The share would be listing on Tuesday the 14th of January. 

There is one issue opening for subscription in the week ahead. It is from Laxmi Dental Limited. The issue consists of a fresh issue of Rs 138 crores and an offer for sale of 1,30,85,467 equity shares in a price band of Rs 407-428. The company is into manufacturing various products used by dentists for dental care and is a B to B to C company. The issue is at a PE multiple of 79.65-83.76. Looking at the small size of the company and an extremely fragmented market, the expectations of the promoter and more so of the selling PE investor are very high. This leaves nothing on the table for even risk-taking investors. While the present mood in the markets would ensure over subscription and probably listing games, one wonders what would happen thereafter. 

Markets are currently placed at key support levels of 23,430 points on NIFTY which has acted as support and is now in the process of giving way. The next level is at 23,200 points. On the resistance side we have levels of 23,700-23,800 points which in the current scenario is like Mount Everest. Looking at Dow on Friday, it appears that the best scenario for the markets could be a weak opening on Monday followed by some fall and then a recovery over a couple of days. This could be followed by yet another fall. 

The continued selling by FPIs is hurting our markets and the fact that a rate cut in the US may no longer be on expected lines is leading to funds moving to the US. The best an investor could do is to move to large cap stocks and stay away from small cap and large cap stocks as they face the brunt of selling. 

Trade cautiously.

The week gone by which had two days in outgoing 2024 and three days in 2025 was choppy and volatile and reminding all of what a turbulent and volatile year 2024 was. The high of the year was made in September, and it was a slow and gradual downside over the next quarter. We have ended around midway as far as gains for the calendar year are concerned. Its also the lowest gains on the benchmark indices since covid in March 2020. The week saw the indices gain on two of the five trading sessions and lose on three. Thursday saw a big jump where benchmark indices gained about 1.8% and losing almost half of it on Friday. Welcome start to the new calendar year as far as volatility is concerned. 

BSESENSEX gained 524.04 points or 0.67% to close at 79,223.11 points while NIFTY gained 191.35 points or 0.80% to close at 24,004.75 points. The broader indices like BSE100, BSE200 and BSE500 saw gains of 1.06%, 1.10% and 1.16% respectively. BSEMIDCAP was up 1.32% while BSESMALLCAP gained 1.94%. 

The Indian Rupee was under renewed pressure and lost 24 paisa or 0.28% to close at Rs 85.77. Dow Jones was a mixed bag and lost on three of the four trading sessions. A sharp recovery on Friday, saw it recover losses suffered during the week. Dow closed with losses of 260.08 points or 0.60% to close at 42,732.13 points. 

In primary market news we saw four listings with three of them on Monday the 30th of December and one on Tuesday the 31st of December. We also had one issue from Indo Farm Equipment Limited which caught the fancy of investors and was very heavily subscribed. The issue was subscribed 229.68 times with QIB portion subscribed 242.4 times, HNI portion subscribed 503.83 times and Retail portion subscribed 104.92 times. The appetite for new paper seems never ending and one wonders what needs to happen to upset or puncture this enthusiasm. 

There are two primary issues in the week ahead. The first is from Standard Glass Lining Technology Limited which is tapping the capital markets with its fresh issue to raise Rs 210 crores and an offer for sale of 1,42,89,367 shares in a price band of Rs 133-140. The issue would open on Monday the 6th of January and close on Wednesday the 8th of January. This would be the first issue for calendar year 2025.

The company is a specialized engineering equipment manufacturer in India with in-house capabilities to manufacture all the core specialized engineering equipment required in the active pharmaceutical ingredient (“API”) and fine chemical products manufacturing process. 

The second is from Quadrant Future Tek Limited which is tapping the markets with its fresh issue of 1 crore shares totaling Rs 290 crores at the top end of the price band of Rs 275-290. The issue opens on Tuesday the 7th of January and closes on Thursday the 9th of January. The company has just received a large order from the Indian Railways for enhanced railway safety and operations under the ‘KAVACH’ program. As this is a new order, the company needs to demonstrate its execution skill sets over the next 12 months. 

The performance of the newly listed entities was a mixed bag with one issue trading below par at the end of the week while one other registered small gains looking at the market mood. The other two saw gains of close to 46% and 84% respectively. 

The period ahead would continue to remain volatile and choppy. There are three events coming up in the next 25 days. The first is the results season for Quarter 3 for the period October to December. The second is US President assuming office and then issuing orders on a host of trade issues, some of which would be positive and some negative for India. The third is the budget to be declared on Saturday the 1st of February. All of these events have the potential to keep the market momentum going and they would give the markets a positive spin in the coming days. A note of caution however is that currently the markets seem to lack the steam to run away in a tearing hurry. It would be more of a case of two steps forward and one step backwards. A slow and calibrated approach with markets moving up as the events unfold. 

The first levels of resistance for the markets would be levels of 24,500 points on NIFTY and 80,700-80,800 points on BSESENSEX. This should be a good enough target for the week ahead. On the support side, levels of 23,700 on NIFTY and at 78,300 on BSESENSEX would act as strong supports. The strategy would be to look at large cap stocks as they would be the ones which are the first of the block. FPI buying would come in them and that would move markets. Further one small secret, the large cap companies tend to declare results faster than the rest of the markets. 

Trade cautiously.