Markets were marginally negative after four days of trading but Friday was another day. RBI permitting buying by FII’s in shares of HDFC Bank changed the scenario completely and the markets rebounded to close positive for the week. The BSESENSEX gained 134.50 points or 0.47% to end at 28,468.75 points while NIFTY gained 28.15 points or 0.32% to close at 8,821.70 points.
HDFC Bank made an intraday high of 1,454 before closing at Rs 1,377.15, a weekly gain of RsRs 72.65 or 5.57%.In what could be described as a defining moment for India and all Indians, ISRO the space organisation launched its PSLV with a world record 104 satellites. This is the highest number of satellites in a single vehicle.
Results season for the quarter October to December 2016 has ended on a mixed note. The last mega result to be declared was from Tata Motors which had a disastrous quarter and the share reacted quite strongly losing 11.13% for the week. Overall the results during the quarter appear better than expected. This was despite the fact that the demonetisation of high value notes on 8th November was expected to have a negative impact on corporate India which was not as bad.
With various milestones on GST being cleared it appears to be on track for a July 2017 launch and this would be a real mega reform for India with just this measure adding about 1-1.5% to India’s GDP. Secondly this would be a big boost for the organised players in almost all sectors and deal a body blow to the unorganised sector who would have to turn compliant to survive. In such a scenario, market share of organised players would increase and also tax collections of the states and centre.
The week ahead is a truncated one with holidays on Tuesday and Friday. Tuesday for municipal elections in Mumbai where both exchanges are located and Friday for MahaShivratri. This would be preceded by February series expiry on Thursday where the current level of NIFTY at8,821.70 points is higher by 218.95 points or 2.55% compared to the previous expiry of 8,602.75 points. The gains are not substantial but are good enough for the bulls to hold on. With a holiday in between, the series could go either way.
Kraft- Heinz made a bid to acquire Unilever for 143 billion dollars which has been rejected by Unilever board. However the market cap of Unilever gained about 60% in a single day after the bid was made and rejected. It sure would be interesting to see how developments pan out going forward and the reaction to Hind Unilever shares in the coming week. Also the other entity controlled by Kraft in India is the now delisted Cadbury India.
Technically speaking, the market has entered into a very crucial phase at the current levels. There was an upside gap created with Friday’s trading and this gap has entered the same area where a downward gap was created on the 12th of September 2016. The value of this gap was 28,755-28,251 on the BSESENSEX and 8,858-8,746 on the NIFTY. The markets need to cross the upper limit of the previous gap and remain above that for the bullish momentum to continue. In case they fail there could be weakness setting in. With two holidays and expiry next week either of the two eventualities could happen. At the same time the indices are less than 2% away from the highs made in September 2016.
Markets need triggers going forward. Want of them could make the markets drift and lose some momentum which is currently the key driver for them. Election results would be declared in three weeks’ time which could act as a short term trigger in either direction. The effect would be short lived but would be an important event for the markets.
The week ahead is truncated with a mere three days of trading and both holidays India centric couple with expiry. Markets are likely to be volatile and see sharp movements. Trade cautiously.
