The financial year 2016-17 has come to an end and it was a good year for the equity markets.The BSESENSEX ended the year with gains of 4,279 points or 16.88% for the year at 2,962.50 points. Of this as much as 2,994 points or 11.24% was in the last quarter of the financial year. Similarly NIFTY ended the year with gains 1.75,435 points or 18.54% to end the year at 9173.75 points. Of this 988 points or 12.07% was in the last quarter. Notebandi did have an effect on the market as the major portion of the gains in the fourth quarter have come on account of the same. What has really driven the market in the last month of the year is the spectacular performance of BJP in Uttar Pradesh where they won 323 seats out of 403.
This election victory is further confirmed as a big trigger by the FII’s. They are an integral part of our marketand they were buyers for the year with net purchases ofRs 50,000 in the year. Of the above Rs 30,000 was in the last quarter or January-March 2017.
Coming to the week, the BSESENSEX notched up gains of 199.10 points or 0.68% while NIIFTY gained 65.75 points or 0.72%. March series ended with gains of 234.25 points or 2.62% at 9,173.75 points. Friday incidentally was an unchanged day for NIFTY while SENSEX was down 27 points.
Shares of CL Educate Limited and had a very poor showing on expected lines. The company had a simultaneous fresh issue for 21.80 lakh shares and an offer for sale of 25.80 lakh shares in a price band of Rs 500-502. The discovered price was Rs 398 on the BSE and Rs 402 on the NSE. The share then recovered some lost ground and closed at the 5% upper circuit at Rs 417.90 on BSE and Rs 422.10 on the NSE, with losses of 16.75% and 15.92% respectively. What is damaging for the company at this point of time is the extremely poor volume which saw a mere 3.67% of the IPO size being traded. It sure would take a long time before shares bought by investors change hands.
The week ahead sees RBI meet for its policy review on Wednesday and Thursday the 5th and 6th of July. It is by and large expected that interest rates would be kept unchanged even though headline inflation numbers are under control. The thinking is that with the US Fed likely to continue its rate raising stance, any reduction in India could be counterproductive and we could see a huge outflow on the debt front.
The first big result for the quarter January to March 2017 would be from Infosys on Thursday the 13th of April. Whether this 13th is lucky or unlucky for the company’s performance one would have to wait for another 10 ten days. One thing however is sure that Donald Trump has kept this sector under the spotlight with his yet to be finalised policy on visas. The IT industry is currently facing a lot of headwinds and is under pressure.
The week ahead has a trading holiday on Tuesday for Ramnavami. The budget has been passed and so has the GST Bill. It (GST) seems all set for a July roll out and in the coming month’s one will see a number of states passing the relevant bills for GST to ensure the July 2017 deadline.
Everyone is waiting for a correction to enter the markets but that simply doesn’t happen. On every dip we see a huge amount of money being brought in and indices bounce back. The mood is indeed optimistic and with the government having numbers they are now able to push things as never before. In the recent GST bill, there were five changes introduced and passed by the Rajya Sabha which were all voted out by the Lok Sabha and the bill standing as originally proposed. Post April 18 when the next big round of voting happens in Rajya Sabha, BJP which is currently behind the congress in terms of number of seats would become the largest party. While they would still not have a majority, they would be able to breathe much easier.
With a mid-week holiday on Tuesday and RBI meeting following that, there would be thin volumes in the coming week. Markets are likely to trade in a tight zone and wait for some unexpected news which could act as a trigger. Bide out time and wait for dips to enter the market.
