Markets continued their upward trajectory and added to its gains. At one point of time BSESENSEX had crossed 80,000 and registered gains of 10,000 points since the low made on 4th of June when results for the elections were announced. Ten Thousand points or 14.28% is a spectacular gain by all standards and should be taken as a big positive. Markets are witnessing huge inflows where FPIs were caught napping with their bearish mindset and on the other hand domestic funds are flush with SIP funds which have now begun crossing Rs 25,000 crores monthly. At the end of the week, BSESENSEX gained 963.87 points or 1.22% to close at 79,996.60 points while NIFTY gained 313.25 points or 1.30% to close at 24,323.85 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.57%, 1.71% and 1.91% respectively. BSEMIDCAP gained 2.77% while BSESMALLCAP was up 3.88%. BSESENSEX gained on three of the five sessions and lost on two while NIFTY gained on four sessions and lost on one. 

Benchmark indices made new lifetime highs and the intraday high on BSESENSEX was at 80,392.64 points and the closing high at 80,049.67 points, both of which were made on Thursday the 4th of July. NIFTY intraday high was at 24,401 points while closing high was at 24,323.85 points. The intraday high was made on Thursday while closing high was made on Friday. 

The Indian Rupee lost 10 paisa or 0.12% to close at Rs 83.48 to the US Dollar. Dow Jones gained on three of the four sessions and lost on one. It was up 257.01 points or 0.66% to close at 39,375.87 points.  

There is sector rotation happening and this week it was the turn of IT stocks. The BSEIT sector was the top sectoral gainer at 4.15%. Besides the IT stocks, initial momentum was given by HDFC Bank as the FPI limit dropped below 55% and fresh FPI buying emerged. This propped up the share which rose from Rs 1,684 to a high of Rs 1,792, before profit taking saw the share close at Rs 1,648, a weekly loss of Rs 36 or 2.14%. 

The date for the Union Budget has been announced as Tuesday, the 23rd of July on expected lines. This week would also see July futures expire on Thursday the 25th of July, making that an extra volatile week. Keeping this in mind, the flow of IPOs on the main board seems to have taken a pause for the time being. 

In primary market news, we had two listings and two issues opening and closing for subscription. The first share to list was Allied Blenders and Distillers Limited which listed on Tuesday the 2nd of July. The company had issued shares at Rs 281. On listing day, the closing price was Rs 317.85, a gain of Rs 36.85 or 13.11%. By the end of the week, the price had moved up to Rs 343.90, a gain of Rs 62.90 or 22.38%.   

The second share to list was Vraj Iron and Steel Limited which had issued shares at Rs 207. The share listed on Wednesday the 3rd of July. The share closed at Rs 251.95, a gain of Rs 44.95 or 21.71%. Over the remaining two days, the price moved up to close at Rs 260.95, a gain of Rs 53.95 or 26.06%. 

The first issue to open and close for subscription was from Emcure Pharmaceuticals Limited. The issue consisted of a fresh issue of Rs 800 crores and an offer for sale of 1,14,28,839 shares in a price band of Rs 960-1008. The issue was subscribed overall 68.4 times with QIB portion subscribed 191.24 times, HNI portion subscribed 49.32 times and Retail portion subscribed 7.36 times. There were 28.70 lakh applications in all. 

The second issue was from Bansal Wire Industries Limited which was subscribed 62.76 times overall. The price band was Rs 243-256. The issue consisted of a fresh issue of Rs 745 crores. The QIB portion was subscribed 153.8 times, HNI portion was subscribed 54.21 times and Retail portion was subscribed 14.37 times. There were 21.65 lakh applications. 

Markets need a correction to make them healthy. The timing is one which people are unable to guess. Whether there would be one before the budget or post the budget is a million-dollar question and has been speculated over the last couple of weeks. IT results would begin this week with TCS announcing them on Thursday the 11th of July. This would be a crucial result as IT stocks have run up quite sharply on the expectation that the turnaround in IT stocks as far as results are concerned is here. Only results would clarify the same. 

FPI activity in the markets is still confusing as they are alternating between buying and selling. Over the last three days they were buyers in the cash market whereas on the previous three days they were sellers. Their short positions around the election results time have been reduced significantly. 

Coming to the markets in the week ahead, expect sector rotation to continue. As a result, there would be volatility and sharp two-sided moves. In such a situation taking a call is always difficult and would require swift action to be taken. Market has momentum and plenty of participation with newer stocks participating. What it lacks is depth as on a number of days we saw the market declines overshadowing gains, indicating that a few stocks prop up the markets. In such a situation one needs to take some money off the table to invest if compelling opportunities present themselves. 

With new highs once again being made, the mood and market optimism favor the bulls. However, the bears are waiting to put that one foot in the door and pounce on the bulls who seem to have used up almost all their resources. In the coming week I would expect the bears to make a comeback and gain control for the time being. 

In conclusion, trade cautiously and as mentioned earlier expect sudden swings and change of mood in the markets.

Markets in the week went by shifted gears dramatically from Tuesday and for the next three days there was high speed driving at the bourses. This resulted in big gains and markets touching new levels and more importantly crossing 79K on BSESENSEX and 24K on NIFTY. It also brought to an end the highly volatile month of June which began with election exit polls and then results which saw the biggest upheaval in markets in a very long time. At the end of it all, markets were actually up, having more than regained losses of the 4th of June and seeing big monthly gains. BSESENSEX gained 1,822.83 points or 2.36% to close at 79,032.73 points while NIFTY gained 509.50 points or 2.17% to close at 24,010.60 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.95%, 1.67% and 1.48% respectively. BSEMIDCAP gained 0.42% while BSESMALLCAP was up 0.37%. Markets gained on four sessions in a row during the week and saw profit taking on the last day of the week. Two interesting observations during the week’s trading was the advance decline ratio turning negative even though markets rallied sharply on Tuesday and Wednesday. The other observation was the out of favor IT pack registering sharp gains during the week. 

The Indian Rupee gained 18 paisa or 0.22% to close at Rupees 83.38 to the US Dollar. Dow Jones gained on three of the five sessions. It ended the week with gains of 529.70 points or 1.33% to close at 39,118.86 points. 

Thursday the 27th of June saw June futures expire. It was a volatile day but bulls were fully in control. The series ended with gains of 1,555.75 points or 6.92% to close at 24,044.40 points. It’s been a very successful month for bulls and they have registered more than handsome gains. The month ahead is likely to see the budget being presented in all probability in the week beginning 22nd July. This would be the expiry week for July series with expiry happening on Thursday the 25th of July. This would make that particular week extra volatile and choppy. 

The week gone by saw three primary main board issues list and two issues open and close for subscription during the week The week ahead will see two IPOs open and close during the week with the two IPOs of the previous week listing as well. 

The first issue to list was from Dee from Dee Development Engineers Limited who had issued shares in a price band of Rs 193-203 and had received excellent response and was oversubscribed 102.32 times. Shares debuted at Rs 339 and closed at Rs 335.32, a gain of Rs 132.32. By the end of the week, the share lost marginally and closed at Rs 322.10, a gain of Rs 99.10 or 58.67%. 

The second share to list on Wednesday was Akme Fintrade (India) Limited which had issued shares in a price band of Rs 114-120. The issue was subscribed overall 54.24 times and had issued shares at Rs 120. The share debuted at Rs 127, made a high at Rs 133.35 and closed there. The share gained Rs 13.45. By Friday, the gains were reversed and the share closed at Rs 119.15, a loss of Rs 0.85 or 0.71%. 

The third share to list was Stanley Lifestyles Limited. The company had issued shares at Rs 369 and listing happened on Friday at Rs 499. The share closed day one at Rs 474, a gain of Rs 105 or 28.46%. 

The first issue to tap the capital markets is Emcure Pharmaceuticals Limited which would open on Wednesday the 3rd of July and close on Friday the 5th of July. The issue consists of a fresh issue of Rs 800 crores and an offer for sale of 1,14,28,839 equity shares in a price band of Rupees 960 to 1,008. The company as the name suggests is into manufacturing, marketing and drug discovery. It sells in India and globally. It had some issues in the US and had as a prudent measure demerged the US Subsidiary to safeguard the parent from litigations which may arise. The PE band is at 34-86-36.60 based on annual results for the year ended March 24. The company had reported revenues of Rupees 6,715.12 crores and a net profit of Rupees 527.57 crores. The EPS for the company was Rupees 27.54. The company had a flattish year compared to March 23 as  sales grew from Rs 6,031 crores while net profit for the previous year was higher at Rs 548 crores. The EPS for March 23 was Rupees 29.42. The PE multiple is on comparable levels with its peer set. Investment may be made in the share for the medium term. 

The second share to tap the capital markets is Bansal Wire Industries Limited which is tapping the capital markets with its fresh issue to raise Rs 745 crores in a price band of Rupees 243-256. The issue opens on Wednesday the 3rd of July and closes on Friday the 5th of July. The company is a manufacturer of mild steel high carbon, mild steel and stainless steel wires. It has a capacity of approximately 3 lakh tons and is setting up a new plant with a total capacity of 3.5 lakh tons. The new plant will have within it multiple facilities and has partially been commissioned and would be fully ready in a phased manner over the next 6-8 months. Suffice to say that with the plant coming on stream in a phased manner,  the run rate of production in the next three quarters would have risen to a near optimum even though cumulatively for the year it would be lower. 

The company reported total revenues of Rupees 2,470 crores and a net profit of Rupees 78.79 crores. This translated into an EPS of Rupees 6.18 for the full year and a PE multiple of 39.32-41.42. There would be significant improvement on these numbers as the new capacities ramp up as there are economies of scale, better and modern machines with larger capacities and a mix of value-added products.  All of this would help in increasing margins at all levels whether it be gross, EBITDA or net. Investment in the issue should be for a medium to long-term looking at the prospects. One can also look at a short-term punt with listing day objectives. 

Coming to the markets in the week ahead, one should see volatility increasing. The fact that markets have reached crucial and expected levels of 24K on NIFTY and 79K on BSESENSEX, gives one the belief that more is in store. Another 500 points on NIFTY and roughly 1,500 points on BSESENSEX open up as targets and upper resistance levels. The possibility of midcap and small cap showing fatigue and a feeling of rising too much and too fast was clearly visible last week. There is likely to be a correction in these segments and one will find different stocks behaving differently. Budget is just about three weeks away and expectations will start building up, keeping the market glued onto happenings. Sector rotation would be the key and wherever one finds sharp movements, the three day theory must be kept in mind. You must enter on the first day and look to get out on the third day before the correction sets in and stocks are distributed. 

The strategy for the week ahead would be three-fold. Firstly, book some profits and take some money off the table. Secondly concentrate on large cap stocks and exit small cap and midcap stocks. Thirdly or finally look for sectors which create new movement for the quick entry and exit strategy. Finally, as we get closer to budget, expect sharper two-sided moves in the markets. 

Trade cautiously.