The markets did virtually nothing closing with minor losses. The BSESENSEX lost 60.52 points or 0.215 to close at 28,832.45 points while NIFTY lost 41.95 points or 0.47% to close at 8,897.55 points. Markets across the board were in a similar fashion recording small losses or minor gains.
The week ahead would be one of expectancy on the election results slated for Saturday the 11th of March. Exit polls were due on the 8th of March when the last round of pooling was to be conducted but have now been shifted by a day as polls would also be held in a few seats on Thursday the 9th of March. There can be just two logical results where the ruling party at the center does well in Uttar Pradesh or does not come up to expectations. In the former case the markets would take it positively and we would see a further strong rally and momentum in the markets. In the latter case depending upon the extent of disappointment markets would react negatively and see correction.
In either case there has to be a build-up in the current week or logically speaking markets should gain ground into the exit polls and also election results. Monday the 13th of March is a holiday and markets would react to election results after Holi on Tuesday with a thumbs up or thumbs down. Volatility on that day would be very high.
Action this week would be in the primary markets where two issues are opening and closing during the week. The first issue is from Music Broadcast Limited which is raising Rs 400 crs through a fresh issue of shares and also an offer for sale of 26.58 lakh shares in a price band of Rs 324-333. The revenues of Music Broadcast for financial year ended March 16 were Rs 245 crs compared to the market leader ENIL (Entertainment Network India Limited) the owners of Radio Mirchi of Rs 533 crs.
The second issue is from is from market investor R K Damani promoted Avenue Supermarts Limited which is raising Rs 1,870 crs from a fresh issue in the price band of Rs 295-299. The company runs 118 stores in nine states and one union territory. It recorded revenues of Rs 8,803 crs for the nine months ended December 2016 and a net profit after tax of Rs 387 crs. The company is currently the darling of the markets and the unofficial premium of the same is closer to 70% of the issue price. While the response could be termed as a frenzy, sanity would return to the issue a few days after listing and prices stabilize.
All in all a week where there would be action in the primary market driven by expectations from the election result front. Volatility would be the order of the day. Expect market to score gains initially.
