The week went by and had four trading sessions and gained on all four of them. What was significant was the fact that the daily gains seem to be getting smaller and markets are giving a sense of tiring out. They seem to be struggling to gain at close. BSESENSEX gained 598.03 points or 1.00% to close at 60,431.00 points while NIFTY gained 228.85 points or 1.30% to close at 17,828.00 points. The broader indices like the BSE100, BSE200 and BSE500 saw the markets gain 1.28%, 1.33% and 1.34% respectively. BSEMIDCAP was up 1.52% while BSESMALLCAP gained 1.53%.
The Indian Rupee gained 3 paisa or 0.04% to close at Rs 81.85 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It ended the week with gains of 401.18 points or 1.20% to close at 33,886.47 points.
Retail inflation (CPI) in March was at 5.66% against 6.44% in the previous month. IIP or industrial growth in February was at 5.6% against 5.4% in January. Looking at the numbers on inflation and IIP, the decision of the RBI to take a pause in raising interest rates becomes a brilliant move. The move was well timed and gives the economy time to wait for the outcome of the monsoon.
Results season has begun and it could be said that the beginning is not the best one could have hoped for. While TCS was slightly below expectations, at the end of it all the result could be termed as overall acceptable. However, the result from Infosys was disappointing and the guidance for the next year 2023-24 was even more disappointing. Expect the share to be under pressure when trading resumes in the coming week.
The week ahead would see the listing of Avalon Technologies Limited on Tuesday the 18th of April. This is likely to be followed with Mankind Pharma Limited tapping the capital markets with its IPO which would conduct its roadshow in the middle of next week. The issue is a mega issue and would be in the region of around Rs 4,500 crs. The company had reported an EPS of Rs 35.78 for the year ended March 22. As per street expectations, the price band would be a four-digit number in the region of Rs 1,000 plus minus Rs 50. The top line reported was around Rs 8,000 crs and the net profit after tax was about Rs 1,450 crs for the period ended March 2022.
I strongly believed that markets were expecting a lot from the annual results to be declared this time around. If this is the beginning, then one may have to either wait for a series of good results or would by force have to change expectations from results for the year.
We have had a good three-week rally from the lows made towards the end of March. The ensuing rally has been fast and furious. While one expects markets to typically pause for breath or undergo a correction, nothing of that sort has happened in our markets. Maybe the poor set of numbers from Infosys may trigger the correction.
Key resistance for the markets would be at 17,850-900 on NIFTY and at 60,550-60,700 on BSESENSEX. If these are breached, then the next levels would be at 18,050-18,100 and at 61,100-61,250 points. On the support side, the immediate levels are at 17,550-17,600 and at 59,800-60,050 points. In case this is breached the next levels would be at 17,250-17,300 and at 58,800-58,950 points.
The strategy for the week would be to use rallies to sell and buy on sharp dips. While over the last week, my expected correction did not happen, it’s likely to happen this week. Trade cautiously.

It was a very short three-day week which had trading on Monday, Wednesday and Thursday last week. The good part was that markets gained on all three days with the bulk of the gain coming on Wednesday. While this would be the third consecutive weekly gains, the momentum of the previous week was certainly missing. BSESENSEX gained 841.45 points or 1.43% to close at 59,832.97 points while NIFTY gained 239.40 points or 1.38% to close at 17,599.15 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.30%, 1.28% and 1.36% respectively. BSEMIDCAP was up 1.19% while BSESMALLCAP gained 2.85%. 

The Indian Rupee gained 29 paisa or 0.35% to close at Rs 81.88 to the US Dollar. Dow Jones gained on three of the four trading sessions. Dow gained 211.14 points or 0.63% to close at 33,485.29 points. It may be mentioned here that of the three days of gains, one day was actually flat. Yet another point to be made was that Nasdaq and S&P 500, both lost for the week. Dow was a standalone gainer mainly on account of the sharp jump in crude oil prices in the beginning of the week. It appears the rally is likely to pause for breath in the coming days. 

RBI in its bi-monthly policy meeting decided to keep repo rates unchanged. It mentioned that it’s just a pause and that the rates may be raised going forward. Very clearly the difference in inflation in India and the US and the issues being faced by the two economies have come out. Repo rate remains unchanged at 6.50%. 

Markets began trading for the new financial year on a positive note last Friday (31st March) and carried part of the same momentum into this week as well. There was action in midcap and Smallcap stocks during the week. One saw sharp one day moves where stocks moved 8-15% in a single day. Very clearly part of this was friendly support and not linked to any significant buying in the stock. The rally happened in many of the recently listed stocks which had slipped significantly from their highs. The sustainability or further movement from here would depend on buying emerging in these stocks. 

The IPO from Avalon Technologies Limited which was open between Monday the 3rd of April and Thursday the 6th of April was subscribed. The company had tapped the markets with its fresh issue for Rs 320 crs and an offer for sale of Rs 545 crs in a price band of Rs 415-436. The issue was overall subscribed 2.32 times with QIB portion subscribed 3.75 times, HNI portion undersubscribed at 0.43 times and Retail portion undersubscribed at 0.88 times. There were roughly 39,000 applications in all. The subscription to the issue could be termed as average and probably explained with the holidays during the week. 

The week ahead would be interesting with there being four days of trading and Friday being a holiday in India alone. This would lead to squaring up of positions on Thursday depending on which way the markets have moved during the week. Key resistance for the markets would be at 17,850-900 on NIFTY and at 60,550-60,700 on BSESENSEX. If these are breached, then the next levels would be at 18,050-18,100 and at 61,100-61,250 points. On the support side, the immediate levels are at 17,250-17,300 and at 58,800-58,950 points. In case this is breached the next levels would be at 17,000-050 and at 58,050-58,200 points. 

TCS would be declaring results on Wednesday the 12th of April followed by Infosys on Thursday the 13th of April. Wipro has announced the date as 27th of April. The first two results would give a fair idea about traction that IT companies are having in the US and also about hiring and firing that is being witnessed in the sector. For rural demand one would have to wait a little longer till consumer companies declare results.

The strategy for the week would be to keep an eye open for early trends from companies reporting results to get a sense of costs and demand. The rally has been swift and sharp and a little too good for comfort. If this rally has legs, it needs to first consolidate at these levels, failing which it would be in danger of fizzling out. Stick to the large caps and wait for solid news flow before committing fresh money. There is no need to be in a tearing hurry to invest. Trade cautiously.