The week gone by got of to a rollicking start on Monday with the BSESENSEX gaining 331 points. This helped the markets as it gained marginally on Tuesday and Thursday and saw profit taking on Friday, end with gains of 303.92 points or 0.79% at 38,251.80 points. NIFTY gained 86.35 points or 0.75% to close at 11,557.10 points. BSEMIDCAP was up 1.49% but BSESMALLCAP lost 0.01%.
Dow Jones closed with gains of 87.75 points or 0.34% to close at 25,790.35 points. Trade wars and the after effects continue to dog global markets and now one is hearing talks of impeachment of the US President.
In primary market news, the issue from Credit Access Grameen Limited managed to close the listing day at just around the issue price of Rs 422. It lost some ground the next day and closed, at Rs 406.65, a loss of Rs 15.35 or 3.64%.
The week ahead would see August Futures expire on Thursday the 30th of August. NIFTY is currently higher by 389.80 points or 3.37% and clearly bulls have an upper hand. Holding on to the lead with some minor losses should not be an issue for the bulls. Knowing the way, they move the market, expecting a strong gap up opening on Monday should be the order of the day.
Larsen and Toubro announced an unexpected share buyback at a significant premium to the market. There was an announcement that the board would meet to consider the buyback. The price then was Rs 1245. The announcement at Rs 1,500 saw the markets rallying further and they closed at Rs 1,343 at weekend, a premium of Rs 157 or close to 11%. The surprise element of the buyback was apparently to dilute ugly events at the AGM of the company where one saw employee shareholders raise issues about use of company land for making a hospital at Powai in the name of the granddaughter of Mr Naik. One is not sure whether the employees are continuing or are ex-employees. The curt reply given was that the matter is sub judice. This gives rise to speculation that there could be more revelations as time passes. Also, that the timing of the buyback was diversionary in nature and could be to act as a sweetener for the market.
SEBI has come out with a discussion paper on ‘Fair Market Conduct’. The report is a voluminous one running into 116 pages. It has widened the scope of many terms used in the financial market like intermediaries, insider trading and unfair practices. It has also questioned the lending of funds to HNI’s for trading beyond the known resources of these individuals. While it is a discussion paper, if comments are not offered it’s a matter of time before it would become law. To access the full report, Click Here.
Markets have had a long rally and seem to be coming to an end. Normally rallies end on euphoria and this time around there is no such feeling. One wonders what we have in store for this end or putting it differently how it would all end. Simple advice stay light, and use rallies to sell. Similarly, sharp dips could be used to buy into, but stock selection should be based only on fundamentals.
