After a gruelling seven phase poll which ended yesterday, the exit polls have given the ruling NDA a comfortable majority in the results to be announced on Thursday the 23rd of May. They are expected to cross the 300 mark in a house of 542 members. This will ensure a huge gap up movement in the morning when markets open and they will remain at these higher levels till results are announced. If they are by and large in line with the exit polls the rally will further strengthen with the same becoming widespread and larger number of stocks participating. If they are completely wrong, there could be a sharp selloff leading to mayhem.
Markets were super volatile all through the week. Monday saw the markets begin on a neutral note and it appeared that the anticipated reversal after eight straight days of losses would happen, but then someone hit the futures with a large sell order and markets cracked. Probably the seller had inclination that China would retaliate on the US imposing higher duties on 200 billion dollars of US imports. China did retaliate that night by imposing duties of 20 and 25% on 60 billion dollars of US exports to China. Markets rose on Tuesday instead and the reversal did happen.
BSESENSEX gained 467.78 points or 1.25% to close at 37,930.77 points while NIFTY rose 128.25 points or 1.14% to close at 11,407.15 points. The low of the week was 36,956.10 points while it was 11,108.30 on the NIFTY. This effectively means that the BSESENSEX rose almost 1,000 points from the low while NIFTY rose 300 points. The broader indices saw BSE100, BSE200 and BSE500 gain 0.90%, 0.66% and 0.46% respectively. BSEMIDCAP was down 0.57% while BSESMALLCAP was down 1.55%. Markets gained on three of the five trading days while they lost on two days.
The rally on Friday was very strong and the BSESENSEX gained 537 points while NIFTY gained 150 points. If one were to look at it in another way the markets were negative on a weekly basis at Thursday end and became positive only with Friday’s rally. Looking at the magnitude of the rally one is tempted to believe that people were aware of the outcome of exit poll after six phases and that led to this strong rally on Friday.
Dow Jones was down 178.37 points or 0.69% to close at 25.764 points. The Indian Rupee too was under pressure and lost 31 paisa or 0.44% to close at Rs 70.22 to the US dollar.
Healthcare sector or the pharma sector was under severe pressure with any pharma companies declining around 10% after news of a suit being filed by 44 US States against 20 companies which named seven Indian companies as well. These companies are Wockhardt, Glenmark, Dr Reddy’s, Aurobindo, Lupin, Zydus and Taro which is a subsidiary of Sun Pharma.
Tata Global Beverages and Tata Chemicals have agreed to demerge the consumer division of Tata Chemicals and merge the same with Tata Global Beverages. This should be positive for both the companies. Shares of Tata Global Beverages were up sharply gaining Rs 36.85 or 18.57% to close at Rs 235.30, while Tata Chemicals gained Rs 28.80 or 4.88% at Rs 619.10.
Markets will open gap up on Monday and there is not much one can do. Avoid trading as markets may not offer intra day volatility in the first three days.
