Markets opened with a bang on unexpected news of the HDFC Bank and HDFC Limited merger announcement on Monday morning. Thereafter markets corrected themselves and gained again only on Friday. At the end of the week, they closed with gains. BSESENSEX gained 170.49 points or 0.29% to close at 59,447.18 points. NIFTY gained 113.90 points or 0.64% to close at 17,784.35 points. The broader indices saw BSE100, BSE200 and BSE500 gain 1.37%, 1.54% and 1.70% respectively. BSEMIDCAP gained 3.52% while BSESMALLCAP was up 3.72%.

The Indian Rupee lost 11 paisa or 0.15% to close at Rs 75.90 to the US Dollar. Dow Jones lost 97.15 points or 0.28% to close at 34,721.12 points.

The unexpected announcement about the HDFC Twins merger came as a surprise and saw markets led by the twins registering huge gains. The gains on Monday saw BSESENSEX rise 1,335 points. Of this rise, HDFC Bank gained Rs 150.15 or 582.10 points while HDFC gained Rs 227.95 or 365.56 points. Effectively the twins combined gained 947.66 points or almost 71% of the rise in the BSESENSEX. Over the course of the week, these gains were given up. At the end of the week, HDFC was up Rs 7 or 0.29% while HDFC Bank was up Rs 9 or 0.60%.

RBI in its bi-monthly review meet kept key policy rates unchanged on expected lines. While the US FED is toying with the idea of a sharp increase in the next meeting of 50 basis points, the rates in India were kept unchanged. RBI wants to keep a check on inflation and is working on maintaining the same in a tight band.

Invesco, the investor who had a major dispute with Zee and the management sold 7.4 cr shares or 7.8% equity in ZEE Entertainment. While the buyers of the shares were not known from details available on the stock exchanges, this surely puts to rest the long pending dispute and opens up the acquisition by Sony of the company.

Shares of Ruchi Soya Industries Limited sold through its follow-on offer of Rs 4,300 crs listed on the bourses and created history. The shares were allotted at Rs 650 which was a steep discount to the traded price at the time of the FPO. People felt that the difference would narrow significantly. None of this happened. The discovered price was Rs 855 on NSE and Rs 850 on BSE. The share closed even higher at Rs 923.45 and Rs 925 respectively. This gives gains of Rs 273.45 or 42.06% to investors. Readers would recall that SEBI had asked the company to give an exit route to investors who had applied in the issue for two days. The overall subscription in the issue which was subscribed 3.80 times had reduced to 3.60 times. Even at the listing price of Rs 855, the returns were 31.5%. These returns are unparalleled in the stock market of any company which has issued shares through a follow-on offer and even more so the fact that the public holding has increased from 1.2% to roughly 19%.

Post the issue, the company has retired all debt and is now a debt free company. Further it has announced that it would dilute its shareholding by another 6-7% to achieve the minimum 25% share- holding required before 31st December. With this performance, the face of the company Baba Ramdev has already prepared the launch of the public issue from Patanjali at a later date.

In geo-political news, Imran Khan the Pakistan PM lost in a vote of no-confidence after massive drama. He continues the track record of no PM in Pakistan ever completing his full term. He also becomes the first PM to be ousted from office through a no-confidence motion. On the Russia-Ukraine front, the never-ending war just continues. It’s already 46 days old. There is no negotiation or settlement anywhere on the horizon.

Coming to the week ahead expect markets to continue their upward trend with corrections. The week gone by saw the BSESENSEX make a high of 60,786 points and a low of 58,876 points during the course of the week. Similar levels on the NIFTY were at 18,114 and 17,600 points. For the week ahead expect markets to trade higher. The lows of the previous week would act as strong supports while the levels of 61,000 on BSESENSEX and 18,300 points on NIFTY would act as resistances. The movement witnessed in the Smallcap and midcap space are indeed encouraging and would help the depth of the market to improve.

The trading strategy for the week should be to continue to buy on dips and sell on strong rallies. As the trading week has two trading holidays on Thursday and Friday, the volatility could be sharp and movement swift. Be prepared for profit taking if markets rally on all three days as Thursday would be a holiday exclusive to India while Friday would be a holiday in the US as well. Trade cautiously.

Markets in the week gone by behaved on expected lines and gained quite sharply. Markets opened on a weak note on Monday and then did a U-turn. They gained on four of the five trading days. BSESENSEX gained 1,914.49 points or 3.34% to close at 59,276.69 points while NIFTY gained 517.45 points or 3.02% to close at 17,670.45 points. The broader markets saw BSE100, BSE200 and BSE500 gain 3.02%, 3.01% and 3.04% respectively. BSEMIDCAP gained 2.75% while BSESMALLCAP was up 3.23%.

The Indian Rupee gained 41 paisa or 0.54% to close at Rs 75.79 to the US Dollar. Dow Jones was flattish for the week losing 42.97 points or 0.12% to close at 34,818.27 points.
The week was eventful with the financial year and March futures ending on the last trading day. March futures ended with gains of 1,216.80 points or 7.49%. The financial year 2021-22 saw the BSESENSEX move from 49,509.15 points to 58,568.51 points, a gain of 9,059.36 points or 18.30%. NIFTY moved from 14,690.70 points to 17,464.75 points, a gain of 2,774.05 points or 18.88%. Despite the turmoil and the Russia Ukraine war, it has been much more than an average year for stock market returns. It is even more significant from the fact that this is the second consecutive year of super returns for the market.

The follow-on public offer from Ruchi Soya Industries Limited was subscribed 3.80 times. SEBI then directed the company to allow investors two days to withdraw their bids because some messages were circulated to induce investments. During the withdrawal, bids for 97.40 lac shares were withdrawn against total bids received of 17.60 lac shares. The follow-on offer oversubscription was reduced from 3.80 times to 3.60 times. The closing price of Ruchi Soya at the BSE on Friday was Rs 943.55, a premium of Rs 293.55 or 31.11% to the discovered or allotted price of Rs 650. Shares from the FPO are likely to list on Friday the 8th of April. I believe the listing price/discovered price should be around Rs 700 on listing day.

The Russia-Ukraine war seems to have become a never ending one and we seem to be getting nowhere. The world carries on and there are the usual noises coming from the concerned parties. In the meanwhile, the word’s largest miner of Gold, Russia, has announced a new fixed price for its currency with gold. The price per gram of gold has been specified as 5,000 Roubles. This has virtually reduced the value of gold by around 30%. This announcement offers countries wanting to buy crude oil and gas from Russia, an alternate currency to Euros, Dollars and Roubles. How things pan out in the near future would be interesting developments.

India seems to have become an interesting hot spot from the political point. We have had unexpected and sudden visits from a number of large countries in the last fortnight. While such visits need not translate into instant results, it certainly improves India’s stock as a global player. On the other hand, two of our neighbours are in dire straits. Pakistan Prime Minister is on the verge of being voted out in a no-confidence motion. Sri Lanka is on the verge of an economic crisis and things could get serious with civil riots as days pass by with power cuts being the order of the day.

Markets have entered the stage where annual results and fourth quarter results for the period January-March 2022 would be announced. Over the next 60 days these companies would have to announce their results. With the performance witnessed in the December quarter, expectations of good and improved results have been raised. There could be issues with the profitability as there has been massive cost pressure with commodity prices rising disproportionately. It would be interesting to see how companies which have seen sharp rise in selling prices manage their costs.

The week gone by saw two interesting developments in the market. The first was the change in approach from FII’s or FPI’s. They seem to have run out of shares to sell and have turned buyers. While their purchases are not yet that big to confirm a change in trend, it still gives a fair indication that big selling is unlikely to happen. The second is that after a very long time there is movement and participation in Smallcap and midcap stocks. This could be attributed to NAV propping during the last week to some extent. However, there is a strong undertone suggesting that these segments would witness buying as we go forward.

Coming to the markets in the week ahead, expect markets to continue their upward move. There is strong momentum in the markets and that should hold them in good stead. There would be equal amount of traction in large cap as there would be in select midcap and Smallcap stocks. Markets are well poised to break out of the last resistances and gain as we go forward. As immediate targets, expect the BSESENSEX to gain another 1,000 points at the bare minimum and NIFTY about 350 points. This need not be a straight jump but would see some ups and downs as well. Post markets crossing 60,500 and 18,100 respectively, markets would take a call based on their strength and momentum. Enjoy the rally as it unfolds.