The week gone by had four trading sessions but the action and drama that unfolded, was on expected lines. The final closing does not give any sense of what transpired during the four sessions. For the record book, BSESENSEX lost 107.97 points or 0.19% to close at 55,329.32 points. NIFTY lost 78.60 points or 0.48% to close at 16,450.50 points. The broader indices saw BSE100, BSE200 and BSE500 lose 0.60%, 0.65% and 0.89% respectively. BSEMIDCAP was down 1.14% while BSESMALLCAP lost 2.27%. To continue with the story, BSEFMCG was up 3.92% while BSEMETAL lost 8.62%. In individual stocks one saw Hind Unilever gain Rs 214 or 8.90% followed by Britannia Industries gaining 8.89% and Nestle 7.03%. On the losing side, Vedanta was down 17.99% followed by Hindalco 8.65%, JSW Steel 8.54% and Tata Steel down 5.82%. The bulk of these gains and losses came on Friday when the market was sharply down. Hind Unilever contributed gains of 108 points on BSESENSEX while Tata Steel lost 88 points.
The benchmark indices made new highs, both on intraday basis and closing basis during the week as well. BSESENSEX touched 56,118.570 points on intraday basis and 55,792.27 on closing basis. NIFTY made an intraday high of 16,701.85 points and 16,614.60 points on closing basis. The breadth of the markets was extremely negative and for every five declining stocks, there was just one gainer.
The Indian Rupee lost 13 paisa or 0.18% to close at Rs 74.38 to the US Dollar. Dow Jones hit a new lifetime high and intraday high on Monday the 16th of August at 35,631 points and 35,625.4 points before correction set in. The week closed with losses of 395.30 points or 1.11% at 35,120.08 points. Concerns on Fed tapering, rising inflation and fallout of Afghanistan withdrawal are top on the minds of US markets.
The week gone by saw five primary issues list with two of them making their debut at a discount to the issue price. These were Windlas Biotech Limited and Car Trade Tech Limited. As the week progressed yet another stock, Krsnaa Diagnostics slipped into negative territory. The two that are trading above par are Devyani International and Exxaro Tiles. The week ahead sees the remaining three primary issues list on Monday and Tuesday. The possibility of all three of them having a poor showing is quite likely and the record book would say that of the last 8 listings, six would be in the red. These are Nuvoco Vistas, Aptus housing and Chemplast Sanmar. Further there have been no new issues in the previous week and none are expected in the coming week. A lull of 15 days seems like a shocker with the spate of issues that we have witnessed. Four issues opening on a single day.
It’s not far to see that this state is brought about by the greed of private equity players with promoters and merchant bankers responsible in equal quantities, who have been pushing valuation parameters to beyond reality and valuing the companies at what can be best described as obscene valuations. Post greed of this magnitude there can be only one fallout and that is disaster.
Shareholder activism is gaining ground and passing of resolutions are being opposed by minority shareholders. Last week shareholders opposed the pay hike of 10% to MD Siddhartha Lal of Eicher Motors. The unfortunate part was that the resolution for pay hike was linked with his reappointment as well. This is wake up time for corporates. Another issue gaining ground is independence of independent directors.
On the covid-19 front, the world saw 21,25,83,644 patients, 44,44,390 deaths and 19,01,97,556 patients who had recovered. In India we saw 3,24,48,969 patients, 4,34,784 deaths and 3,16,73,103 patients who had recovered. Compared to the previous week, the world saw 45,99,557 new patients, 69,629 deaths and 37,50,525 patients who had recovered. In India we saw 2,23,794 new patients, 3,110 deaths and 2,69,144 patients who had recovered. The latest count of vaccinations has moved up to 58.14 crs. The pace of vaccination is encouraging and it appears that the hesitancy of people in getting themselves vaccinated is abating.
The week ahead sees August futures expire on Thursday the 26th of August. The current level of NIFTY at 16,450 points means that the August series is ahead by 672 points or 4.26%. This clearly shows that bulls are in control of the series and it appears impossible that they could lose control. While the mood of the market has swung from bullish to more of a corrective one, to lose so much in a mere four days looks virtually impossible. Markets would witness two sided movements which would be brutal and swift.
Markets in the last week made a new high, corrected from there, midcap and Smallcap stocks were under severe pressure and we saw a heavyweight stock like Hind Unilever gain sharply. The strategy going forward which has been sell on rallies and buy on sharp dips is being modified. While the broad thinking remains the same, an added caution is being added that buying would be deferred for a week or until key support levels are tested or reached. Readers would recall the resistance zones of 53,000 levels on BSESENSEX and 15,950 levels on NIFTY. These would become key support zones and should be used to buy in the market. Until these levels are reached it makes sense to wait for sharp corrections or the trend becoming clearer. Primary market would add to the pains of the secondary market in the coming week as well.
