The week gone by saw markets gaining on the very first day as expected, but losing every other day for the remaining four days of the week. The fall on a daily basis was not significant, but enough to dent the market and make it more vulnerable in the coming week. BSESENSEX lost 628.15 points or 0.83% to close at 75,311.06 points while NIFTY lost 133.35 points or 0.58% to close at 22,795.90 points. The broader markets saw BSE100, BSE200 and BSE500 behave differently with BSE100 losing 0.20% while the other two gained 0.06% and 0.22% respectively. BSEMIDCAP gained 1.62% while BSESMALLCAP was up 0.98%. Our markets gained on one trading session and lost on four of them.
The Indian Rupee gained 13 paisa or 0.15% to close at Rs 86.70 to the US Dollar. Dow Jones had a torrid week and lost on two of the four trading sessions and gained on one. It was virtually flat on the fourth session. It lost 1,118.06 points or 2.51% to close at 43,428.02 points. Friday was the worst performing day for the markets in US in calendar 2025 so far. Tariffs and rising cost of living coupled with sharp drop in confidence index is hurting the economy.
Coming to our markets, you would be wondering why the markets turned on Monday? Markets gained on Monday the 17th of February, which could be termed as a relief and it broke the momentum of the falling market which would be a simple answer. Technically it is more than just that. The number eight, is an important part of Fibonacci series which is preceded by 5 and followed by 13. We had already suffered losses for eight consecutive days and if it had not turned, the next turning date would have been after another five days or after 13 days of fall. That is more or less unprecedented. Hence the one day of gain. FPI’s too sold on four of the five trading sessions during the week and bought on one. Looking at the fact that US interest rates look unlikely to decline in the near term as inflation is a cause for concern, expect the selling to continue. This would be even though this is the lowest FPI holding as a percentage in Indian markets. One other point worth noting is that the carnage in midcap and small cap one saw on Friday the 14th of February, actually helped many stocks recover some ground during the week gone by. It was just a corrective pull back because of the sharp selling and it should not be seen as a reversal.
There were two listings on the main board in the previous week. The first was Ajax Engineering Limited which had issued shares at Rs 629. Shares listed on Monday the 17th of February at Rs 593 and closed day one at Rs 595.60. By weekend, the share had recovered some lost ground to close at Rs 604.05, a loss of Rs 24.95 or 3.97%.
The second share to list was from Hexaware Technologies Limited. Shares which were issued at Rs 708, debuted at Rs 745.50 on BSE and Rs 731 on NSE on Wednesday the 19th of February.. The share closed at Rs 763.85 on BSE, a gain of Rs 55.85 or 7.88%. On the NSE, the share closed at Rs 755.75, a gain of Rs 47.75 or 6.74%. Shares gained further as the week progressed and they closed at Rs 818, a gain of Rs 110 or 15.54%.
On Monday we would see the listing of Quality Power Electrical Equipments Limited. The company had tapped the capital markets with its issue between the 14th and 18th of February. The issue was subscribed an overall 1.29 times with QIB portion subscribed 1.03 times, HNI portion subscribed 1.45 times and Retail portion subscribed 1.83 times. The price band was Rs 401-425. The response could at best be termed as muted for the issue. With a weak market expected today one wonders how this issue would list.
I have repeatedly been pointing out that merchant bankers and promoters have been out pricing their issues. A fall out of this is that there are no issues opening this week and none on the anvil in the following week either. It’s a wake up call for merchant bankers and they need to understand that when investors apply for an IPO, listing gain may not be a criteria, however capital erosion is something they do not expect. Hope in the short hiatus, one sees some wisdom dawning on the people concerned, otherwise it would have been a case of killing the golden goose.
The week ahead sees February futures expire on Thursday the 27th of February. This would be preceded by a trading holiday on Wednesday the 26th of February. The current level of NIFTY at 22,795.90 points is lower for the series by 453.60 points or 1.95%. the series had begun at 23,249.50 points. With a mere three sessions to go, it would be a tall order to expect the bulls to pull it back. On ground reality, expect the bears to have a smooth sailing in capturing this series comfortably. They could increase the lead to their advantage.
The markets have been successfully holding ground at the broad band of 22,700-22,800 and has done so on multiple occasions in the immediate past. God forbid if this were to break and sustain on the downside. We could see mayhem in the market ensuing.
Coming to the markets in the four-day week which has expiry as well. It would be effectively two periods of two sessions each separated by a holiday. Expect markets to open weak after what happened in the US on Friday and the fact that over two consecutive sessions the Dow has lost about 1,300 points. With strong support likely to give way in our markets we could be in for a torrid time. Next support would be at 22,300-400 points on NIFTY and at 73,800-74,100 points on BSESENSEX. On the upside it appears that levels of 23,250-23,300 and 76,650-76,800 would be very strong and tough to overcome.
The trading strategy would be to look for safety in large cap stocks and refrain from dabbling in midcap and small cap stocks unless they have been researched and short listed by you. Trade cautiously and wait if you are looking to make a portfolio for yourself. Allow markets to stabilize as currently we have more uncertainty and volatility than desirable.
