The week gone by had four trading sessions but they were as volatile as ever. The week began well and when we returned on Friday after the Thursday holiday, it appeared that the week would end positively. Alas! Nothing of that sort happened and we saw markets melt between 3pm and 3.30pm on Friday, on account of MSCI index rebalancing. FPI’s sold Rs 1,10,839 crores and bought Rs 89,733 crores on Friday. The net sales were Rs 21,105 crores which is a huge number. Domestic institutions were net buyers of Rs 16,764 crores. This floating stock will take some time to be absorbed. 

In a week where we saw markets gain on one of the four trading sessions, BSESENSEX lost 639.61 points or 0.85% to close at 74,775.74 points while NIFTY lost 171.55 points or 0.72% to close at 23,547.75 points. BANKNIFTY gained 183.85 points or 0.34% to close at 54,239.20 points. The broader markets saw BSE100, BSE200 lose 0.39% and 0.11% while BSE500 gained 0.01%. BSEMIDCAP was up 1.71% while BSESMALLCAP gained 1.85%. The top sectorial gainer was BSEPOWER up 3.73% while the top loser was BSEFMCG down 1.59%. 

The Indian Rupee gained 56 paisa or 0.59% to close at Rs 95.14 to the US Dollar. Dow Jones gained on three of the four trading sessions and lost on one. It gained 452.76 points or 0.90% to close at 51,032.46 points. 

NIFTY futures for May expired on Tuesday the 26th of May. The series had begun at a level of 23,995.70 points. It closed with a minor loss of 82 points or 0.34% to close at 23, 913.70 points. 

The intraweek highs were made on Tuesday at levels of 76,627 points on BSESENSEX and at 24,089 points on NIFTY. The lows which were made on Friday were at 74,589 points and 23,484 points respectively. 

We have one main board IPO which is opening on Wednesday the 3rd of June and closing on Friday the 5th of June respectively. The issue which is entirely an offer for sale of 3,28,58,323 equity shares in a price band of Rs 182-192 is from CMR Green Technologies Limited. The company is India’s largest metal recycler in the domestic aluminum recycling industry. The clientele includes top OEM’s in the two wheeler and four wheeler manufacturers and also auto component manufacturers. CMR Green has 13 strategically located plants across the country concentrated near its customers which helps it in also supplying liquid metal to them. 

The company in the last 16 years since inception grew at a CAGR of 23%. The company reported revenues of Rs 6,666 crores for the year ended March 25 with EBITDA of Rs 303.71 crores and a PAT of Rs 155 crores. The company looks interesting simply because of the fact that aluminum is 100% recyclable and its uses are increasing rapidly. Secondly the strong client and customer base ensure that the company has an automatic growth charted out to existing customers and new customers as well. The average capacity utilization is around 70% which helps the company take care of peak demands and also plan regular maintenance as well. The PE multiple of the issue based on FY 25 number is at 28-29.54 times which is very competitive as compared to the peer set. Investments are warranted for the medium term looking at the demand and opportunity in the sector. 

The week ahead sees RBI meet for its policy review meeting between the 3rd and 5th of June. It is widely believed that even though inflation is rising in India, it is still within the band set by RBI and therefore rates would be kept steady and unchanged. Could RBI make a mild change in its stance for growth considering oil prices, not sure?

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.