Markets last week seemed to just melt and gave way. They lost on four of the five trading sessions and managed to gain on one. While it may not sound nice, Friday the 13th, spooked markets once again. The loss on Friday was 1,470 points on BSESENSEX and 488 points on NIFTY. The weekly losses were even higher with BSESENSEX losing 4,354.98 points or 5.52% to close at 74,563.92 points while NIFTY lost 1,299.35 points or 5.31% to close at 23,151.10 points. BANKNIFTY lost 4,025.40 points or 6.97% to close at 53,757.85 points. The broader indices saw BSE100, BSE200 and BSE500 lose 5.21%, 5.06% and 4.87% respectively. BSEMIDCAP lost 4.48% while BSESMALLCAP lost 3.66%. While IT stocks took a breather this time around, the top loser was BSEAUTO which was down 9.95%.
The Indian Rupee weakened and lost 78 paisa or 0.85% to close at Rs 92.58 to the US Dollar. Dow Jones lost on four of the five trading sessions and gained on one. It was down 943.08 points or 1.99% to close at 46,558.47 points.
The primary markets saw one listing during the week. Shares of Sedemac Mechatronics Limited which were issued at Rs 1,352 listed on Wednesday the 11th of March. They debuted at Rs 1,510 and closed at Rs 1,432.10, a gain of Rs 80.10 for the day. At the end of the week, the share price gained marginally to close at Rs 1,462.80, a gain of Rs 130.80 or 8.20%.
There are two issues currently open but they are struggling. The first is from Innovision Limited. The issue was open from 10th of March to 12th of March. On not receiving adequate response, the issue was extended to now close on 17th of March. The issue continues to struggle.
The second was from Rajputana Stainless Limited and was open from 9th of March to 11th of March. The issue was struggling but managed to get subscribed. SEBI has come down hard on the company for two violations. Firstly, there anchor allocation was wrong as there was only one anchor against the mandatory minimum two required. Hence that has been cancelled. This involves 8,19,720 shares which would be added back to the subscription size. Secondly, they have solicited subscription for which they now have to give a withdrawal option for three days until Monday the 16th of March. There has been withdrawal of 2.22 lac shares so far and this has brought the subscription to below the minimum required. What would happen will be known only on close of the issue on Monday. Very clearly bad signs for the markets and worsens the poor sentiment prevailing in the market place.
The INVIT from NHAI, Raajmarg Infra Investment Trust Limited received excellent response and was well subscribed. The issue was oversubscribed 12.65 times.
The Israel-US war against Iran has entered the third week and seems there is no resolution so far. While Iran has offered to talk, US is not ready as they believe that Iran is already ‘CRIPPLED’. A new statement has come from Trump which says that countries moving oil from the Strait of Hormuz should send there own ships to protect the crude. Iran on the other hand is willing to allow movement of crude if payment of same is made in Yuan. Reminds one of how the USA and the US Dollar came on the global front in 1974 with Saudi oil pricing in USD. Tough times ahead and the whole world will pay for what Trump is doing.
Coming to markets, key support levels have been broken mercilessly and we are looking at tough times ahead. New support levels exist at 23,000 and further down around 22,800 points. On the resistance side we have levels of 23,800 and higher up at 24,300-24,500 points. In the current scenario selling at these levels may not be a good strategy. Similarly buying is also fraught with high degree of risk. The fact that FPIs have already sold over Rs 50,000 crores of shares in the current month, makes market liquidity that much more worrisome. The best strategy would be to lie low till the end of the month by which time there would be clarity on a number of issues.
Trade cautiously.
