Mondays seem to be a special day in July for the markets. In the first two weeks markets gained a percent each while in the third it was flat and drama happened on Tuesday when ITC was at the hammering end. The stock lost a massive Rs 37.20 intraday and made a low of Rs 276.90 before recovering. It closed the week at Rs 288.50 down Rs 48.70 or 14.40%. What is really surprising and worth taking note of is that over 9 cr shares changed hands physically or were actually delivered on Tuesday. This makes the value of transaction at Rs 2,500 crs and no names appeared on either the buy side or the sell side. It sure is a big number and very clearly there was huge interest in the stock.
The Reliance AGM was held on Friday and in characteristic fashion the company declared a surprise one for one bonus issue to coincide with its 40th anniversary. It also launched its 4G smart phone which would be available against a security deposit for three years and come absolutely free. The company which also declared impressive results for the June quarter saw its share price gain Rs 55 or3.59% and close at Rs 1,586. This incidentally is a nine year high and helped the market gain from the ITC factor.
The numbers from Wipro were better than what the street expected and the buyback at a substantially higher than market price saw the share register double digit gains. With the broader markets looking very expensive, and IT stocks having done nothing in the last couple of quarters there is a sense of security creeping in the IT sector. Investors are taking the view that with markets set to correct, there is a strong possibility that IT stocks may hold themselves, effectively outperforming the broader market.
Expiry of July series happens during the week ahead and the current level of NIFTY futures is higher by 411.15 points or 4.33% compared to the June expiry. The current level of NIFTY is at 9,915.25 points. The current position is in favour of bulls and they need to continue to press home the advantage otherwise they could be under pressure.
The new President of India has been elected and he would be sworn in on Tuesday the 25th of July. Shri Ram Nath Kovind would be the 14th President of India and the first from the NDA. Shri Abdul Kalam was elected during the NDA term but was not a member of the NDA or BJP.
Markets in the coming week would be volatile with expiry to happen. Currently bulls have the upper hand but it doesn’t take too long for things to change. We need big surprises on the positive side from ongoing quarterly results to keep the momentum going. Stay light and use sharp movements to trade the market.
