It was a long week at the bourses which had plenty of action. At the end of the week there was no %clarity on the direction or trend of the market. BSESENSEX lost 521.05 points or 1.44% to close at 35,673.25 points. NIFTY lost 183.05 points or 1.68% to close at 10.693.70 points. The broader indices saw the BSE100, BSE200 and BSE500 lose 1.77%, 1.77% and 1.79% respectively.
After spectacular gains of roughly 1,250 points in the previous week Dow Jones almost lost all of it this week and was down 1,149.51 points or 4.50% at 24,388.95 points. One would have thought that after the bonhomie at G-20 summit things would improve. Different people in the US are talking in different languages and this is causing the uncertainty. To compound to the confusion of duties which have already been imposed and would continue and the ninety-day cooling off period is only for new duties yet to be imposed, the CFO and daughter of the chief of Hua Wei was arrested in Canada at the behest of US. She was held in custody over the weekend and the hearing in the case would resume on Monday.
Russia was able to convince OPEC and non-OPEC members and get them to agree to a 1.2 million barrels per day cut. While crude prices rose, the bulls need not celebrate as Russia who is supposed to cut about 2,00,000 barrels is not going to do it in a hurry. The rally seen during the last couple of days may be short lived. Incidentally the US has become a net exporter of crude for the first time in 75 years and one can be sure that sharp rise in crude prices going forward should be ruled out.
On the back of rising crude oil prices, the Indian rupee after a strong rally lost some ground and was down Rs 1.21 or 1.74% to close at Rs 70.80.
Elections to the state assemblies are over and the counting of the same would happen on Tuesday the 11th of December. Exit polls which were announced on Friday evening indicate a close race in Madhya Pradesh and Chattisgarh where the ruling BJP is fighting anti-incumbency of 15 years. In Rajasthan the BJP is expected to lose where in the last 20 years of election results the ruling party has never returned to power. In this backdrop there is likely to be extreme volatility on Monday and Tuesday till results are out.
By Tuesday afternoon it would be all over and markets would have factored in the results. The outcome could see new combinations and permutations being thrown up for the general elections due in six-months from now and how the common platform against the ruling party would shape up. On the economic front things are shaping up with the rupee stabilising and the GDP showing growth.
In such a scenario it makes sense to give the markets time to settle down and then enter. If one does want to buy, Tuesday could be a good day simply because there would be plenty of uncertainty till results are out. In case you have a weak heart you may choose to stay put of action and participate only on Wednesday or Thursday when things stabilise.
