Markets were under pressure last week and failed to recover from the onslaught they faced on Monday because of rising covid-19 cases all over the country. They were marginally up on Tuesday, recovered ground on Wednesday, were again marginally up on Thursday and slipped on Friday. The week saw BSESENSEX register losses of 438.51 points or 0.88% to close at 49,591.32 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.04%, 0.22% and 0.39% respectively. BSEMIDCAP was up 1.20% while BSESMALLCAP was up 2.49%. The top sectoral gainer was BSEMETAL up 6.80% followed by BSEHEALTHCARE 5.56% and BSEIT 4.89%. The top loser was BSEBANKEX down 3.84%.
The Indian Rupee was under severe pressure and lost Rs 1.64 or 2.24% to close at Rs 74.74 to the US Dollar. Dow Jones hit yet another lifetime high of 33,811 before closing at 33,800.60 points, a gain of 647.39 points or 1.95% for the week.
RBI had its monetary policy review meet for the week between Monday the 5th of April and Wednesday the 7th of April kept policy rates unchanged on expected lines. The Repo rate would continue at 4.00% while reverse repo would be at 3.35%. Further the stance would continue to remain accommodative. Incidentally this was the fifth consecutive meeting where rates have remained unchanged.
Readers would be aware that Oriental Bank of Commerce and United Bank of India have been merged with Punjab National Bank. Post the merger two things have happened where the name of the bank has changed to Punjab National Bank and the first four letters of the IFS Code have been changed to read as PUNB. No other change in any numbers has been done. All bank account holders of the erstwhile Oriental Bank and United bank have to run from pilar to post in times of pandemic and change the KYC at various places whether it be trading accounts, bank mandates, insurance policies, demat accounts etc. it would be humbly requested to RBI that they pass a notification requesting all concerned to replace the name of the bank and the first four letters of the IFS Code and finish the formality. In case there is a change in code itself than the concerned individual may approach the bank. This simple notification would save lacs of account holders from untold misery. It may also be mentioned that the same would be happening in the case of Syndicate Bank, Corporation Bank, Andhra Bank and Allahabad Bank. One hopes RBI does look into the issue and oblige.
On the primary markets front we saw the issue from Barbeque Nation Hospitality Limited list on Wednesday the 7th of April. The discovered price was Rs 492 against the issue price of Rs 500. They then rose to hit the high of Rs 590.40 which was the upper circuit of the day and remained locked at that price. Incidentally the upper circuit was hit around 10.30 am in the morning and remained so. Very clearly the difference between the weighted average of Rs 559.37 on BSE and Rs 543.40 on NSE and their respective closing prices, indicate that the short sellers were caught on the wrong foot. The share rose further on the remaining two days of the week and closed at Rs 722.05, a gain of Rs 222.05 or 44.41 %.
The mega issue from Macrotech Developers Limited to raise Rs 2,500 crs from a fresh issue was oversubscribed 1.37 times. The price band was Rs 483-486. The QIB portion was subscribed 3.06 times, HNI portion was subscribed 1.45 times, Retail portion was subscribed 0.40 times while the Employee quota was subscribed 0.17 times.
Covid-19 is becoming worrisome and new mutants and strands seem to be emerging in different parts of the world. India has again crossed Brazil and is now the country having the second highest number of cases. The world saw 13,66,36,292 patients, 29,49,390 deaths and 10,98,65,012 patients recovering. In India we saw 1,35,25,379 patients, 1,70,209 deaths and 1,21,53,713 patients recovering. Compared to the previous week, the world saw 47,28,203 new patients, 83,473 deaths and 36,69,693 patients recovering. In India we saw 9,37,459 new patients, 5,077 deaths and 4,73,755 patients recovering. The rate of new patients has gone up alarmingly and its time that we as individuals step up our efforts to maintain social distancing at all times.
Maharashtra government is contemplating imposition of complete lockdown for about 10-15 days and would take a final decision on the same on Monday the 12th of April. Whether it does go for complete lockdown or a partial one, it is bound to upset the markets which are in any case very delicately poised. Readers would recall that markets had reacted last Monday quite sharply to the rising covid-19 cases. Either which way they are likely to be on tenterhooks till the outcome of the meeting is disclosed and then react depending on the outcome.
Markets have been fairly range bound between 48250-50500 on the BSESENSEX and 14250-14900 on NIFTY. Each time they come closer to either of these levels they seem to be reacting in the opposite direction. Very clearly for a change in trend or a bigger move, one needs to see markets move beyond these levels. The week ahead sees the three IT majors declaring their results. TCS on Monday, Infosys board meets on Tuesday and Wednesday and Wipro on Thursday. Wednesday is also a market holiday. This effectively divides the upcoming week into two equal halves of two days each which would make markets quite tentative and nervous. While the IT sector has gained considerable ground in recent times, particularly last week, the majors declaring results would give a direction to IT performance in the coming quarters and year. While IT, healthcare and metal seem to be on a roll, one is not sure how some of the other sectors would perform.
It makes sense to play safe in the coming week and not over commit in either direction. Levels mentioned above are quite crucial and once violated in either direction could see sharp moves. Stay light and use rallies to book profits. Hopefully, during the course of the week, markets would decide on a trend. In case we see markets falling very sharply say over 2%, selective buying may be initiated.
