Markets began last week under tremendous pressure on the back of a massive surge in covid-19 cases. The stringent norms on movement of people imposed in Maharashtra which amounts to a night curfew and almost a day lockdown added to the woes. BSESENSEX lost 759.29 points or 1.53% to close at 48,832.03 points. NIFTY lost 217 points or 1.46% to close at 14,617.85 points. The broader markets saw BSE100, BSE200 and BSE500 lose 1.61%, 1.70% and 1.83% respectively. BSEMIDCAP was down 2.91% while BSESMALLCAP lost 2.68%. In sectoral indices there were no gainers with BSEMETAL losing the least at 0.31%. Incidentally in the previous week, BSEMETAL had gained the most.
Dow jones hit a new lifetime high of 34,257 points. It gained 417.30 points or 1.23% to close at 34,217.90 points, off its high. The Indian Rupee recovered some lost ground and gained 39 paisa or 0.52% to close at Rs 74.35 to the US Dollar.
Wipro declared its annual results which were virtually flat at Rs 50,299 crs versus 50,387 crs, a year ago. Net profit however was higher at Rs 10,060 crs versus Rs 8,680 crs. The one single item which made the major difference in expenses was travel costs which fell sharply from Rs 1,537 crs to Rs 436 crs, a saving of Rs 1,101 crs. This could be a saving on account of covid-19 and work from home protocol. The growth witnessed in the fourth quarter was 3.3% which gives a sense of comfort that things are getting back on track. Further this growth in fourth quarter helped the company to report almost flat revenues for the full year, which were negative at the end of the third quarter.
The low of the week was hit on Monday when the BSESENSEX cracked and touched 47,693 points. This violated the trading zone that we have been discussing in the last couple of weeks. The low on NIFTY was 14,248 points. The trading zone of 48,250-50,500 on BSESENSEX and 14,250-14,900 on NIFTY now looks as having broken and in the immediate short term one should expect only corrective rallies with a downward bias. Even though we had a short trading week with four sessions, the fall on Monday was enough to shake the markets. They gained on the next two days and were flattish on the last trading day.
The week ahead would see the listing of Macrotech Developers Limited which had raised Rs 2,500 crs through a fresh issue in the price band of Rs 483-486. Shares would list on Monday the 19th of April. Wednesday the 21st of April is a trading holiday and would break the market trading week like the previous week into two distinct and equal halves, with no momentum being built possible.
Covid-19 seems to be on a rampage and is registering a big rise in daily cases and also deaths. In India we are seeing a surge in many parts and strict regulation in local laws have been introduced to curb the spread of the virus. The world saw 14,19,99,954 patients, 30,32,865 deaths and 12,05,31,685 patients recovering. In India we saw 1,50,57,767 patients, 1,78,793 deaths and 1,29,48,848 patients recovering. Compared to the previous week, the world saw 53,63,662 new patients, 83,475 deaths and 1,06,66,673 patients recovering. In India we saw 15,32,288 new patients, 8,524 deaths and 7,95,135 patients recovering. The number of people who have been vaccinated in the country has crossed the 10 crore or 100 million mark. The rate of vaccination has stepped up and there is demand that it be opened up for all age groups. There would be a time lag before the same can happen as you need adequate stocks of vaccine.
The week ahead would see quite a few of the large companies which form part of the benchmark indices, declare their results. Many of the banks would be doing so. The previous week saw the three IT majors declare their results. Infosys announced a market buyback at a maximum price of Rs 1,750. A market buyback differs from a tender buyback wherein in the latter, an individual shareholder tenders his shares and in the former, the company buys from the market. What a market buyback does ensure is, that the market price if under pressure gats stabilised.
The week ahead would see markets trying to stabilise themselves. While covid-19 situation is worrisome and needs to be tackled head-on, it’s not as if all is lost. Economic activity cannot be shut down and state governments have to find a way out of the current situation without shutting down everything. This would keep markets guessing and therefore under pressure. It makes sense to remain light and allow markets to play out the week without getting over-committed. Use strong rallies to sell and sharp falls to add selectively. Markets would trade with a negative bias and a fall below the previous week’s low of 47,700 on BSESENSEX and 14,248 on NIFTY would bring severe pressure on them. Trade cautiously.
