Markets went through the motions and five days were over, with nothing achieved. The sad part of the current geo-political mess is that the so called aggressor or peace maker is not sure how he can quit the war. We are almost a 100 day old war now and it seems like it started just the other day. When will it be over, ‘Only Trump Knows’. Hopefully!
Our markets fell on three of the five trading sessions and gained on two. BSESENSEX lost 532.40 points or 0.71% to close at 74,243.34 points while NIFTY lost 181.05 points or 0.77% to close at 23,366.70 points. BANKNIFTY gained 257.05 points or 0.47% to close at 54,496.25 points. The broader markets saw BSE100, BSE200 and BSE500 lose 0.84%, 0.90% and 0.78% respectively. BSEMIDCAP was down 2.17% while BSESMALLCAP lost 0.14%. The top sectorial gainer was BSECONSUMER DURABLE which gained 1.68% while the top loser was BSEPOWER which lost 2.96%.
The Indian Rupee gained 19 paisa or 0.20% to close at Rs 94.95 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It was down 165.68 points or 0.32% to close at 50,866.78 points.
RBI had its MPC (Monetary Policy Committee) meet during the 3rd to 5th of June. At the end of the same it decided unanimously to keep interest rates unchanged. Repo rate would remain unchanged at 5.25%. This also reflects the ‘neutral’ stance of the committee. Looking at the geopolitical conditions on the Middle East crisis, RBI lowered the Real GDP growth projection from 6.9% to 6.6%. It also revised upwards CPI inflation for FY27 to 5.1%.
The IPO from CMR Green Technologies Limited received excellent response. The entirely offer for sale was open from Wednesday the 3rd of June to Friday the 5th of June. The price band was Rs 182-192. The issue was well received and had excellent response. It was subscribed a massive 127.04 times and received 33.30 lakh applications. QIB portion was subscribed 270.46 times, HNI portion 172.35 times and Retail portion 27.03 times.
The highs and lows for the week on BSESENSEX and NIFTY were at 75,367.93 and 23,733.70 respectively while the lows were at 73,492.60 and 23,161.50 points. While the highs were made on the opening day of the week, the lows were made midweek on Wednesday.
Coming to the week ahead in our markets, one doesn’t get a nice feeling sitting just before trading for the week actually happens. The events unfolding in the Middle East point to a badly cornered and confused US President who is not able to find an honorable exit. Already Iran has given an option even about the contentious enriched uranium that it is willing to give it to China, something that I have been talking about a couple of weeks ago. What this does for the ongoing war is that it strengthens Iran’s position and puts USA and Israel in a bigger spot than ever before with their once issue of Nuclear capability.
Surpassing levels of 23,600 points on NIFTY will be a challenge and the resistance would be the top of last week at 23,733 and more broadly speaking around 23,800 points. On the support side we have support at levels of 23,150 points which happens to be the low of last week and even lower at 22,800 points. One gets an uncanny feeling with FPI’s continuing to be aggressive sellers we could see markets under pressure in the coming week. RBI has made investments in some securities attractive for FPI’s. They have abolished tax on G-Sec and also long term capital gains tax beyond 12 months for this category. There would be positive news because of this but it may take some time for inflows to begin.
The strategy for the week would be to restrict trading to intraday and avoid large overnight positions. The Middle East crisis seems to be never ending and is becoming more complex with each passing day. Trade cautiously.
