It was a great week at Dalal Street and it appeared that the bulls decided to have Diwali celebrations a week earlier. There were gains on three of the five trading days, one day of correction and one day of a flat market. The gains on the BSESENSEX were 1,662.39 points or 4.98% at 35,011.65 points. NIFTY gained 523 points or 5.21% to close at 10,553 points. This is the best weekly performance in a long time and certainly the best in 2018. The broader markets saw the BSE100, BSE200 and BSE500 gain 5.45%, 5.59% and 5.69% respectively. BSEMIDCAP gained 7.34% and BSESMALLCAP was up 6.38%.
The Indian Rupee had a good showing and gained 97 paisa or 1.32% to close at Rs 72.49. Dow Jones gained 582.52 points or 2.36% to close at 25,270.83 points. Crude oil too softened and all in all it was a great week for India where the markets went up, rupee appreciated, and crude oil price softened.
Sanctions against Iran kick in from this week, but some exemptions have been given to eight countries including India. It appears that India would pay for Iranian crude oil in rupee terms through Uco Bank which does not have any international branches and therefore has no risk of sanctions.
The NBFC crisis would get resolved to a great part once the 14th of November passes with a very large number of CP’s (commercial papers) due for payment or roll over. Once all the NBFC’s have paid or successfully rolled over the current crisis in the stock markets would be averted and things would start moving to business as usual.
The SFB crisis of last week has been partially resolved with Equitas holdings announcing that they would dilute by creating a separate company in which the SFB or small finance bank is housed and then move to creating a merger of the two entities. Readers would recall this issue as being highlighted by e even at the roadshows of the concerned companies. While one has announced its decision the other company Ujjivan Finance is yet to announce their course of action, but it must be on similar lines. RBI is the boss and there are no two ways about it as far as SFB’s, NBFC’s or banks are concerned.
The week ahead sees Diwali and there would be ‘Muhurat Trading for an hour on Wednesday the 7th of November between 5.30 pm to 6.30 pm. Thursday would be a holiday and therefore one is likely to see profit taking on Tuesday in the second half of trading. What happens on Friday would depend on events in the US with China trade wars and elections due on Tuesday the 6th of November, where the Democrats are expected to fare better and cause problems for the Republicans.
The week has been good with relief and joy on markets, crude and the rupee and it has come at the right moment. Markets will look to build on these gains and with corporate results providing some help should be able to do so. While markets will be choppy and the gains going forward not as sharp expect markets in the near short term to trade with a positive bias.
Wishing all readers a Happy Diwali and Prosperous New Year Samvat 2075.
