Markets had a tough week and failed to cross important resistances. They faltered at the very first level on the opening day of the week itself. The rest of the week was spent in trying to regain lost ground. BSESENSEX lost 298.22 points or 0.48% to close at 61,729.68 points while NIFTY lost 111.40 points or 0.61% to close at 18,203.40 points. The markets saw the broader indices like the BSE100, BSE200 and BSE500 lose 0.59%, 0.58% and 0.48% respectively. BSEMIDCAP lost 0.19% while BSESMALLCAP gained 0.44%. Markets lost on three of the five trading sessions and gained on two sessions. 

The Indian Rupee was under pressure and lost 50 paisa or 0.61% to close at Rs 82.66 to the US Dollar. Dow Jones had a quiet week and gained on three of the five trading sessions. Dow gained 126.01 points or 0.38% to close at 33,426.53 points. While the debt limit resolution will eventually happen, as of now it continues to remain in a state of flux and is causing markets to remain confused. 

The primary and fresh issue of units from Nexus Select Trust which is a consumption based real estate offering listed on the bourses on Friday. Units which were issued at Rs 100, debuted on the bourses at a discovered price of Rs 102.27 on BSE and Rs 103 on the NSE. They closed day one at Rs 104.26 on BSE and Rs 104.29 on NSE. Gains made were 4.26% on BSE and 4.29% on NSE. 

The largest Public Sector bank SBI, reported excellent numbers for the quarter ended March 23 and also its annual results for the year ended March 23. The company reported a net profit of Rs 18,093 crs for the quarter ended March 23 against Rs 15,477 crs in the previous year. For the year ended March 23 the net profit was Rs 55,648 crs against Rs 35,373 crs in the previous year. The bank has declared a dividend of Rs 11.30 for the year. This is the first bank and only the second company in India to declare an annual profit of over Rs 50,000 crs. 

RBI has declared a dividend of Rs 87,416 crs for the year 22-23 against Rs 30,307 crs paid for the previous year. This almost three times payment would go a long way in ensuring that the government is able to manage its resources well for the year which would have otherwise seen an impact from divestment target not being met. 

The hardly in circulation Rs 2,000 note has been withdrawn by RBI, but would continue to remain legal tender. The common man has been given time till 30th September to exchange these notes from banks till then. Immediately rumour mills have begun talking about the impending issue of Rs 1,000 note to offset the loss of a high denomination note. 

The week ahead would see May futures expire on Thursday the 25th of May. The current value of NIFTY at 61,729.68 points is higher by 288.35 points or 1.61%. While the bulls are ahead its not a comfortable lead and things could change in four trading sessions. It would be an interesting fight between the bull and bears for control of this series. 

The highs in the week gone by were made on Monday itself at levels of 65,562.67 points on BSESENSEX and at 18,458.90 points on NIFTY. Markets never recovered to challenge these levels during the week thereafter. This is even though FPIs continue to be buyers through the week barring one day. 

Coming to the week ahead, there would be resistance at 18,300-18350 levels on NIFTY and at 62,025-62,175 levels on BSESENSEX. If these levels are crossed, the next resistance would be at the top made on Monday at 18,460-18,480 levels corresponding to 62,600-62,700 on BSESENSEX. On the support side reasonable support exists at levels of 18,000-18,050 or 61,150-61,300 levels. If this is violated, then the next level would be at 17,850-17,900 or 60,700-60,850 levels. 

The strategy for the week would be to continue to focus on midcap and Smallcap space. Results and therefore surprises continue in this space. The one heavyweight result which was pending has been declared by SBI and even after an excellent set of results there was virtually no impact on the share price. Results were declared on Friday and on that day, it gained Rs 0.90 at Rs 575.05. For the week, the share lost Rs 3.05 or 0.53%. By and large while there would be intraday volatility, on a weekly basis, we would remain range bound. Trade cautiously.

The week gone by began with a bang with the best gains of the week being registered on Monday. It gained more than what the markets had lost on the previous Friday when the HDFC twins took a beating on the MSCI weightage issue. BSESENSEX gained 973.61 points or 1.59% to close at 62,027.90 points. NIFTY gained 245.80 points or 1.36% to close at 18,314.80 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.52%, 1.36% and 1.30% respectively. BSEMIDCAP gained 1.35% while BSESMALLCAP was up 1.14%. 

The Indian Rupee lost 36 paisa or 0.44% to close at Rs 82.16 to the US Dollar. Dow Jones lost on all five trading sessions and was down 373.76 points or 1.11% at 33,300.62 points. What is worth noting is the fact that four of the five sessions saw losses of low double digits. With Friday seeing single digit losses, it could be presumed that we see Dow moving up in the coming week. 

Karnataka state results saw the ruling BJP lose to the Congress, who won a simple majority on their own. There could be a knee jerk reaction on Monday as markets react to the result. The manifesto of the winning party saw them announce a number of freebies which are not liked by the market. There could also be a slowdown to the industrialisation that was being witnessed in the state. One could expect that some of the large MNC players looking to manufacture in India, look at other states.

Shares of Mankind Parma which was entirely an offer for sale of just about 4 cr shares at Rs 1,080, listed on Tuesday the 9th of May. The discovered price was Rs 1,300 and the share closed at Rs 1,424.05, a gain of Rs 344.05 or 31.85%. By the end of the week the share closed marginally lower at Rs 1,395.70, still gaining Rs 315.70 or 29.23%. 

The issue of units from Nexus Select REIT was oversubscribed 5.73 times overall. The institutional portion was subscribed 5.04 times and the non-institutional portion subscribed 6.55 times. The company would be listed probably on Friday the 19th of May. 

The complex deal between ABRFL and TCNS Clothing was not favoured by the street and shares of both companies lost ground with TCNS being the bigger loser. Shares of TCNS closed at Rs 400.45, a weekly loss of Rs 120.35 or 23.10%. Shares of the acquirer ABRFL lost Rs 15.35 or 7.16% to close at Rs 198.85. The deal implies the acquirer making an open offer to acquire shares of TCNS and then the remaining shares being swapped into ABFRL to complete the merger. Ultimately the shares of TCNS would stop trading. 

While there are a couple of issues looking to tap the markets, valuations seem to be the key and the stumbling block in their going public. It would be interesting to see how many issues do come in the second fortnight of May. 

Results from the heavyweight companies are out and now just the midcap and Smallcap stocks remain. While individually these stocks could move upward or downward post their results, concern about the benchmark stocks would remain. They have declared their results. 

Market momentum seems to be missing and that explains why even though markets move up they seem to be held back at crucial resistances. With a lack of momentum, we could see yet another week where markets, after moving down at the beginning, make yet another move to break out of key resistances, only to falter at the end. 

The market would find support at levels of 18,050-18,100 on NIFTY and at 61,050-61,200 on BSESENSEX. This looks as it would hold. However, the next level of support would be 17,800-17,850 and 60,450-60,600. On key resistances, the current level of 18,350-18,400 and 62,100-62,250 would act as strong resistances. It may also be taken as a pivot for the market. If these levels are breached and sustained, then the next levels would be 18,550-18,600 and 62,700-62,850. Currently the second levels look quite difficult to be achieved in the week ahead. We need news flow and a forceful momentum to take us up. There is a positive for bulls in the fact that over the last couple of weeks, FPIs have turned buyers. To add fuel to the bulls, inflation has come down and there may be a pause in interest rate hikes from RBI going forward. 

The strategy would be to sell into strong rallies and buy on sharp dips. The focus would continue to remain in the midcap and small cap space.