The week gone by was very volatile on expected lines and as mentioned last week. BSESENSEX ended with losses of 72.95 points or 0.19% to close at 39,0637.33 points. NIFTY gained 1.85 points or 0.02% to close at 11,754.65 points. The broader indices saw BSE100, BSE200 and BSE500 lose 0.31%, 0.47% and 0.54% respectively. BSEMIDCAP lost 2.07% while BSESMALLCAP was down 1.38%.
The volatility saw intraday moves of over 500 points on three of the five trading days and around 325 on the remaining two days on the BSESENSEX. Similarly, NIFTY saw moves of around 150 points on three days, 100 on one day and 81 points on the fifth day. The average intraday move on the BSESENSEX was 458 points while it was 132 points on NIFTY. This kind of volatility has not been seen for a very long time. If marketmen are to be believed while in normal circumstances, traders relish volatility, this time they also did not enjoy the same as there was unpredictability in market trends.
Dow Jones was virtually flat, losing 16.21 points or 0.06% to close at 26,543.33 points. The Indian rupee was under pressure on account of crude oil and lost 65 paisa or 0.94% to close at Rs 70.01 to the US Dollar.
April futures expired on Thursday and it was a very choppy series. The expiry at 11,641.80 points, was a gain of 71.80 points or 0.62%.
The issue from Neogen Chemicals Limited which consisted of a fresh issue for Rs 70 crs and an offer for sale of 29 lakh shares received excellent response and was subscribed 41.18 times. The price band was Rs 212-215. The QIB portion was subscribed 30.49 times, HNI 113.88 times and Retail portion 16.06 times.
The new series which began on Friday the 26th of April is for five weeks and would have the election exit poll coming in on Sunday the 19th May followed by results on Thursday the 23rd May. Expiry for May would be on Thursday the 30th of May. The rollovers for the month have been the highest in a very long time at 81%. Similarly, premiums of call and puts are very high indicating that punters and traders are expecting a volatile series and both bulls and bears are not willing to let go.
The fourth phase of polling will be held on Monday the 29th of April. This includes Mumbai where the two exchanges are situated and is therefore a trading holiday for the markets. With the fourth round which would see polling for 71 seats, total voting for 373 seats or 69% of parliament would have been completed on Monday evening.
In what could be termed as a big disaster for the SME sector, in just about a year Five Core Electronics Limited which listed on the ‘EMERGE’ platform of SME becomes a dubious company with serious ramifications for the SME segment. The promoter of the company is ‘absconding’ and the factories are lying shut. The company and its independent directors have filed complaints to this effect and also informed the exchange about the same. The share price has been on a downslide over the last couple of months and were locked down circuit at Rs 33.35. The high of the same was Rs 151. The company has a number of marquee investors as shareholders. If swift action is not taken, this would be a body blow to the blossoming SME segment and would hurt the interests of the exchange and various stakeholders like shareholders and merchant bankers.
There is also a holiday on Wednesday for Labour Day in the country and in Maharashtra for being the day when Maharashtra was formed as a state in 1960. With just three trading days in the week there would again be sharp swings and intra-day volatility. With only crude being a negative factor and some resolution on the US China trade wars becoming imminent, markets would see bulls having the upper hand. The lifetime highs that were crossed in April seem to be holding as a level of support and we seem to be on track to reach the minimum 3% spill over from those levels in the immediate short term. Even this 3% is substantial as we are just about at the level of highs made in August September 2018. This effectively means we have 3% from the current levels to go.
Use volatility to your advantage as this election has three weeks to go which is a long time in the markets. There would be plenty of opportunity so do not panic. Results are a mixed bag with IT doing well and the auto slow down continuing. Pick and choose sectors and within sectors individual companies to invest.
