It was a short week but tough one. Markets gained on three of the four sessions and lost on one. Yet markets ended in the negative simply because the fall on Tuesday was deep. BSESENSEX lost 354.49 points or 0.47% to close at 74,559.37 points while NIFTY lost 88.70 points or 0.38% to close at 23,346.40 points. BANKNIFTY lost 247.85 points or 0.44% to close at 56,385.70 points. The broader markets saw BSE100, BSE200 and BSE500 lose 0.57%, 0.47% and 0.41 % respectively. BSEMIDCAP was down 1.82% while BSESMALL lost 2.21%. The highs of the week were made on Tuesday and the lows were made on Wednesday. The levels were at 75,436.44 points and 73,981.33 points on BSESENSEX and at 23,592.85 points and 23,116.10 points on NIFTY. What is important to note that though markets were under pressure, they did not break key support levels and they have become fairly range bound with a 1500 point movement on BSESENSEX and about 470 points on NIFTY.   

The Indian Rupee lost 42 paisa or 0.44% to close at Rs 95.98 to the US Dollar. Dow Jones lost on four of the five trading sessions and gained on one. It lost 890.65 points or 1.69% to close at 51,682.64 points. The US FED has raised interest rates to a band of 3.75%-4% at its review meeting.  From the minutes of the meeting it appears that there would be one more rate hike at least, considering the steep rise in inflation in the US. It is heartening to note that the new chief of the US Fed has done the natural thing and not listened to the dictate of US President that rates be lowered. 

Looking at what is happening across governments and central banks, expect India to raise rates in its next meeting to be held in October. Inflation is becoming a cause of concern and with the US –Iran war unlikely to end in a jiffy, and oil at 105$ plus, is a global cause of concern. In a couple of months we will start talking of winter setting in, adding to the demand of oil. All of this points to the US mid-term elections due in November and the possibility of Trump not doing well in them. This could lead to global pressure all over again. 

The primary market juggernaut continues unabated. The mother of all issues, NSE Limited is currently open and at the end of 2 days is subscribed. The issue is subscribed 1.16 times with the issue closing on Monday the 21st of September. Currently the Retail portion is subscribed 0.72 times and offers subscribers an opportunity to acquire shares of a proxy play on the Indian economy. NSE has grown at a faster pace than the GDP consistently and with Indian GDP growth expected to continue to grow around 7-8%, this becomes an attractive play. 

There is yet another interesting company tapping the markets in the next week. Elevate Campuses Limited is launching its IPO for Rs 2,100 crores in a price band of Rs 343-362. The issue would open on Wednesday the 23rd of September and close on Friday the 25th of September. The company owns, operates and manages on-campus student accommodation across higher education institutions and also owns K-12 assets. 

The company reported revenues of Rs 401.8 crores in India and Rs 166.8 crores outside India. On a pro-forma basis, the EPS on a fully diluted basis was Rs 13.14. The PE at the cap price is 27.5. The objects of the entirely fresh issue is to buy the school assets from the group companies for Rs 1,100 crores and repayment of debt of Rs 750 crores. It’s an interesting business and merits attention whether from the IPO subscription basis or post listing. 

Markets have held on to 23,000 level last week. Support continues to hover around 22,800 points and lower at 22,500 points. On the upside we have very strong resistance at 23,800 points and markets will have to do something spectacular to break the same. 

The strategy, would be to continue to trade in the market place, buying on sharp dips and selling on rallies. A traders market at best. Hopefully the primary market pressure would end after next week for sure. 

Trade cautiously.

The week gone by had a lot of action in which markets fell quite sharply. Friday was the worst day at start but things recovered in the end. At the end of it all, the week saw markets losing on four of the five trading sessions and gaining on just one. BSESENSEX lost 1,731.82 points or 2.26% to close at 74,914.06 points while NIFTY lost 502.80 points or 2.10% to close at 23,435.10 points. BANKNIFTY lost 763.10 points or 1.33% to close at 56,606.55 points. The broader markets saw BSE100, BSE200 and BSE500 lose 1.88%, 1.85% and 1.68% respectively. BSEMIDCAP lost 1.05% while BSESMALLCAP was up 0.10%. The highs and lows on the BSESENSEX and NIFTY were at 76,477.19 points and 74,160.16 points. On NIFTY they were at 23,890.00 and 23231.40 points. Incidentally the lows were made on Monday while the highs were made on Friday.   

The Indian Rupee lost Rs 1.07 or 1.13% to close at Rs 95.56 to the US Dollar. Dow Jones lost on three of the four trading sessions and gained on one. It was down 840.96 points or 1.57% to close at 52,573.29 points. 

Friday saw markets being hit by oil at close to $108-110 mark as Iran attacked the US Airbase in Jordan and caused heavy damage, (almost destroyed). The date, 9/11, 25th Anniversary. Strange coincidence but food for thought for technical analysts. US midterm elections are getting closer and there seem to be desperate measures being announced. The 5,000 dollar gift to every American if Trump and his party wins is a sad reflection to what USA has come down to. So be it. 

It has been raining IPOs on the main board over the last four weeks or so. Since the 17th of August as many as 22 issues have listed on the main board. In the coming week there would be another 11 issues listing taking this number to 33 issues in five weeks. 

The week ahead has the much talked about and awaited issue from NSE Limited hitting the markets. The issue is entirely an offer for sale of 12,64,36,650 shares in a price band of Rs 1,700-1,785. The issue would garner approximately Rs 22,562 crores at the top end of the price band. The issue would open on Thursday the 17th of September and close on Monday the 21st of September. The PE of the issue at the price band is 40.85-42.89. The issue is a proxy to the capital markets and the exchange is the dominant player in the capital markets with an overall market share of close to 90%. While the PE is lower than that of BSE, this becomes the upside for the investor going forward. There is no identifiable promoter and the company has 100% public shareholding implying that there would be no overhang of dilution for minimum public shareholding. However, post six months of listing there would be no lock-in of shares which could see shareholders exiting if prices have risen. 

Three of the recently listed IPOs saw a major pump and dump exercise happening on Friday the 11th of September. These were Shankesh Jewellers, Sunshine Pictures and Molbio Diagnostics. Unprecedented volumes, huge volatility and most importantly price reversals were the order of the day. It’s time for investors to be cautious as this has become the order of the day. 

The week ahead has a trading holiday on Monday on account of Ganesh Chaturthi. This is the day when Lord Ganesh is welcomed with open arms into millions of households across the country. He remains a royal guest for anything between 1-11 days before he is immersed in water whether it be the sea, lake or river. A most auspicious time for people from all religions. 

The week gone by saw markets coming very close to the last bastion of 23,100 points and rebounding. This level of 23,100 would act as a strong support with a fall back to 22,800 points in case markets took a dive. On the upside we have resistance at 23,800 points, a level at which markets have bounced quite often. 

The strategy would be to lie low and watch carefully. Markets cannot move up with oil around 108$, inflation rearing its ugly head and every possibility that a rate hike in the US is in the offing. If Trump manages to hold on to the rate hike, it could mean two, post elections. Use only sharp dips to make purchases or otherwise remain on the sidelines. Tough times ahead.