The week gone by began on a negative note and continued to remain volatile. The news flow on the geo-political front was more positive than what has been seen over the last few months. With the US looking to exit the war honorably and their desperation visible, it’s likely to happen sooner than later. The contentious issue is enriched uranium and that may be tricky. Do not be surprised if in a final settlement, Iran agrees to give the same to China or Russia, rather than US. 

Can the positive news happen tonight? Your guess is as good as mine. The important thing is that US wants to get out as quickly as it can as it has spent almost three months in a war in which it felt would be over in say a couple of weeks at worst. 

Our markets gained on three of the five trading sessions and lost on two. BSESENSEX gained 177.36 points or 0.24% to close at 75,415.35 points while NIFTY gained 75.80 points or 0.32% to close at 23,719.30 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.42%, 0.56% and 0.50% respectively. BSEMIDCAP was up 1.22% while BSESMALLCAP gained 0.59%. The top sectorial gainer was BSEIT which gained 4.08% while the top loser was BSEFMCG which lost 1.46%. The intraweek lows which were made on Monday were at 74,180.26 points and 23,317.10 points. The highs which were made on Thursday were at 75,945.79 and 23,859.90 points respectively.

The Indian Rupee gained 17 paisa or 0.18% to close at Rs 95.70 to the US Dollar. Dow Jones gained on four of the five trading sessions and lost on one. It hit a new all-time intraday and closing high on Friday. The intraday high was 50,830.24 points while the close was at 50,579.70 points. Dow gained 1,053.53 points or 2.13%.  

RBI has declared a dividend of Rs 2.87 lakh crores to the government. They would be meeting in the first week of June (3rd to 5th June) for their policy review meeting. May futures would expire on Tuesday 26th May. The current level of NIFTY at 23,719.30 points is 276.40 points or 1.15% lower than the series open. If positive news does come in, the bulls will pull back and take the series, or it will be a close call. We also have a trading holiday on Thursday on account of a religious festival. This would break market momentum and affect trading trends. Hopefully if the war is resolved by then, it would add to the momentum after a trading break. If not, holiday and then last day of the week, would keep markets under pressure. 

Markets have been range bound last week but for the weak Monday opening when they went down sharply and then recovered to close in positive territory. Resistance for the markets is at levels of 23,800-23,850 points, which is incidentally the high of the week (23,859). If this were to be crossed we would face resistance at 24,300 points. On the support, it exists at 23,300 points, low made on Monday was at 23,317 points. If this were to break, support exists at 22,800 points. 

The strategy would be to build a portfolio and for any trading positions, only intraday. Currently to have overnight positions could be dangerous as we have a man who is calling the shots in this war is badly cornered and looking for an escape route. What he would do next may be irrational as well. 

Keep fingers crossed and hope next week brings good news.

It was a tough and depressing week at the markets. The heat in May, unseasonal rains due to extreme heat, rising tension in the Middle-East, all added to the hot, humid and sweaty conditions that this time of the year one witnesses. President Donald Trump visited China and thought the cowboy that he is, would with a swirl of his hat would capture China. Alas! He was dealing with a super shrewd politician and statesman who cut him to size and sent back with orders for some Boeing aircraft to talk about.

Lets gat back to the markets. BSESENSEX lost 2,090.20 points or 2.70% to close at 75,237.99 points while NIFTY lost 532.66 points or 2.20% to close at 23,643.50 points. The broader indices like BSE100, BSE200 and BSE500 lost 2.51%, 2.55% and 2.63% respectively. BSEMIDCAP was down 3.29% while BSESMALLCAP lost 3.47%. The top sectorial gainer was BSEHEALTHCARE while the top loser was BSEREALTY. Markets lost on three of the five trading sessions and gained on two. The intraweek highs were 76,678 points and 23,997 points, on BSESENSEX and NIFTY, both made on Monday while the lows were at 74,134 points and 23,262 points, made on Wednesday. 

The Indian Rupee lost Rs 1.57 or1.66% to close at Rs 95.87 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It lost 82.99 points or 0.17% to close at 49,526.17 points. !0 year yield in the US has touched 4.57% signaling inflation and rising expectations on yields. 

There was one listing of office space REIT during the week. Bagmane Prime office Reit listed on Thursday the 14th of May. The company had issued units at Rs 100 and on opening day they closed at Rs 103.66, a gain of Rs 3.66 or 3.66%. They gained on Friday to close at Rs 104.10, a gain of Rs 4.10 or 4.10%. 

There are no IPO’s announced so far for the coming week. 

Russian President Putin is to visit China in the coming days. Following the visit of US President, this appears to be an alliance coming up with China, Russia and Iran to take on USA and Israel. Already China has asked Israel to stop its attacks on Iran or they would take part in the Middle East security. The toughening of stand indicates that this war cannot continue in its present format. Either it would peter out or take on a harder stand with ground war breaking out. If one reads between the lines, Donald Trump on board Air Force One was talking of Cuba. Maybe that would be of more importance to him now that he has seen what China has to say. 

India has increased prices of petrol, diesel and CNG. One should brace for inflation rising in the coming weeks as the chain reaction plays out. While Covid-19 was a black swan event, the Middle East crisis is a manmade disaster and only the almighty nation has to be held responsible. However, unfortunately the consequences would be borne by the entire world. 

Coming to markets in the week ahead, they will continue to be dominated by geo-political tensions. There is a silver lining that FPI’s bought some equity in the previous week. Whether it was a one off event or could be a change in trend, time will tell. Austerity measures being announced in a number of countries is making the local people aware of the current tough conditions prevailing. The support levels in the week ahead would be at 23,200-23,300 levels and we bounced last week from 23,262 points. If were to break and sustain the same we could see levels of around 22,900 points. Resistance is at 22,800-23,000 levels. The high made last week was 23,997 points. Clearly shows that we have a really tough week ahead of us. 

Trade cautiously.