The week gone by saw the market register further gains with the BSESENSEX gaining 554.12 points or 1.58% to close at 34,969.70 points. NIFTY gained 128.25 points or 1.20% to close at 10,692.30 points. The broader indices too gained about a percent each.
April futures expired on a positive note and gained 504.10 points or 4.75% to close the series at 10,617.80 points. This is a big gain and one did see short covering on the last date. Rollovers indicate a positive bias.
The big eh of January and is now below jvent coming up is the Karnataka election which takes place on Saturday the 12th of May. Results for the same would be declared on Tuesday the 15th of May. Current opinion polls put the ruling Congress ahead of the BJP but the seats expected have narrowed significantly from the last elections. The JDS is expected to play the kingmaker and get about 18-20% of the seats. While this is one of the four states going to polls in the current calendar year this is expected to set the stage for the general elections due in April-May 2019.
In primary news the season kicks of with the launch of NBFC Indostar Capital Finance Limited. The company is tapping the capital markets with its simultaneous offer for a fresh issue of Rs 700 crs and an offer for sale of 2 cr shares. The issue opens on Wednesday the 9th of May and closes on Friday the 11th of May. The price band of the issue is Rs 570-572. Merchant bankers and promoters would be hoping that the primary market revives after the break and one again sees the flow of issues. Many issues have got stuck as the y now have to update their accounts as per the new accounting standards of Ind-AS.
All is certainly not well at Vakrangee and the stock continues to be locked at lower circuit. The last traded price on Monday the 30th of April was Rs 99.95. For record purposes the share price at the beginning of the year was Rs 421. The share made a high of Rs 515.40 on 24th of January and is now just below 100. Investors just do not believe the company and its credibility is under stress. Just recently on the 27th of April, the statutory auditors of the company PWC have resigned. While the company has reviewed its December quarter, any such news is negative in the current circumstances and acts on shareholder comfort.
Results so far are on the positive side but the valuations are already very steep and therefore do not offer any scope for further increase. One needs to be careful while investing even though it may be for the longer run.
Markets are likely to move up into the election and then wait for a blow off and then correction or correction straight away. Invest cautiously.
