The week gone by was one which markets would like to forget in a hurry. We lost on all five days of the week and are back where we began the rally, all over again. When the week closed on Friday, it looked like next week would be yet another new high and now it appears as how much lower can it go. Very clearly, markets teaches us all a lot of things, including hope and pessimism, expectations and assumptions.  What we have to learn on our own is tempering all of this and taking it in our stride. BSESENSEX lost 2,185.77 points or 2.55% to close at 83,576.24 points while NIFTY lost 645.25 points or 2.45% to close at 25,683.30 points. BANKNIFTY lost 899.40 points or 1.50% to close at 59,251.55 points. The broader indices saw BSE100, BSE200 and BSE500 lose 2.44%, 2.54% and 2.62% respectively. BSEMIDCAP lost 2.60% while BSESMALLCAP lost 3.87%. All the sectorial indices on BSE except BSE CONSUMER DURABLE ended in the red with the biggest loser being BSEOIL&GAS, down 5.69%. The NIFTY from the intraday high of 26,340 made on Friday the 2nd of January in five trading sessions fell to a low of 25,623 points, a fall of 717 points. Effectively, this was the entire trading range over the last few months. 

The Indian Rupee lost 3 paisa or 0.03% to close at Rs 90.16. Dow Jones was riding a wave and gained on four of the five trading sessions and lost on just one. It was up 1,121.68 points or 2.32% to close at 49,504. 07 points. 

There are two IPOs on the main board in the week ahead. One, Bharat Coking Coal Limited has opened on Friday the 9th January and would close on Tuesday the 13th of January. The price band of the issue is Rs 21-23. The issue was subscribed 8.09 times on day one. 

The second issue is from Amagi Media Labs Limited which is tapping the capital markets with its issue which opens on Tuesday the 13th of January and closes on Friday the 16th of January. The price band of the issue is Rs 343-361. The issue consists of a fresh issue of Rs 816 crores and an offer for sale of 2.69 crore shares. The company is Bengaluru based and simplifies complexity of media operations. It eliminates the traditional requirement of having ‘OB’ vans for outdoor events and moves the entire hardware and back office required, to cloud. It then offers these services through a ‘SAAS’ model. Amagi offers these services globally and currently roughly 73% of revenues come from USA, 17% from Europe and the rest from the rest of the world. The business can also be described as a glass to glass offering- which means from camera to your device, which could be a mobile phone or a television set. To monetize revenue it can personalize advertising to any extent. Total revenues were Rs 1,163 crores for the year ended March 25 and Rs 705 crores in the first six months of the current financial year. The company enjoys gross margins of 69% but made losses at the PAT level last year. EBITDA which was minus 21% last year has moved to plus 8% in the first six months and the company is PAT positive now.

There is no PE multiple as there is no EPS. Based on six months earnings it would look expensive no doubt. Investment in the company should only be made looking at the opportunity and the fact that this is a new technology which has just taken off and is becoming popular, with miles to go. There is hardly any competition for the company at present. Investment is warranted only for the medium to long term.

Geo-political tensions have increased with Trump now looking to impose tariffs of 500% on China, India, Brazil and Russia because of Russian oil imports. In effect while South Africa is not in the picture, it’s effectively an assault on ‘BRICS’. The USA has also withdrawn from all the UN associations, very clearly signaling that he does not want to hear about anything that he does being called out. Not sure whether history books a few decades from now will refer to Trump as a ‘Dictator’. He also wants Greenland which is owned by Denmark. Not sure whether this would allow China to annex Taiwan on similar grounds as was done by USA in the case of Venezuela. Tough options and times ahead for all of us. 

Coming to the markets, we are currently heavily influenced by geo-political global cues which are not the best. FII inflows have been negative for a long time and are discounted. The rupee is under pressure and while the economy has been able to withstand global tariff pressures with multi trade deals, there is a nagging doubt about what next. I believe things will pass, it’s only a matter of time. Till then one will have to live with what happens. Budget at the beginning of February will also throw light on how India prepares to face the upcoming uncertain times.

The trading range in which markets have been moving, has shifted downward with support around 25,500-25,550 points. Resistance remains at 26,300 and higher up at 26,500 points. With last week’s fall, the higher levels look that much more distant and support levels look to close for comfort. 

Tough volatile times ahead of us. Trade cautiously.

The week gone by had many events rolled into one. It saw the expiry of December futures series, the end of trading for calendar year 2025 and a new all-time high on the benchmark indices. Let us evaluate and discuss each of them later in the article. BSESENSEX gained 720.56 points or 0.85% to close at 85,762.01 points while NIFTY gained 286.25 points or 1.10% to close at 26,328.55 points. BANKNIFTY gained 1,139.60 points or 1.93% to close at 60,150.95 points. It was a broad based rally and across the board. BSE100, BSE200 and BSE500 gained 1.25%, 1.38% and 1.35% respectively. BSEMIDCAP was up 1.75% while BSESMALLCAP gained 1.17%. BSESENSEX gained on two of the five trading sessions, while NIFTYY gained on three sessions. The gain or loss on Thursday was quite small and it could actually be termed as sideways. The top sectorial performer was BSEMETAL which gained 5.60%. 

The Indian Rupee lost 33 paisa or 0.37% to close at Rs 90.13 to the US Dollar. Dow Jones lost 328.58 points or 0.67% to close at 48,382.39 points. Dow gained on one of the four sessions and lost on three. 

Coming first to December futures expiry which happened on Tuesday the 30th of December, it was a quiet affair. For the series, NIFTY gained 54.05 points or 0.21% to close at 48,382.39 points. It closed at 25,938.85 points. The series had begun at 25,884.80 points. 

Friday the 2nd of January saw fresh new all-time high indices being made on the NIFTY and BANK NIFTY on an intraday and closing basis while BSESENSEX made only a closing high. The intraday high remains at 86,159.02 points which was made on 1st of December. The intraday highs on NIFTY and BANKNIFTY are at 26,240 and at 60,203.75 respectively. 

BSESENSEX was impacted by ITC which bore the brunt of selling over the last two days on account of a new central excise announced which would come into effect from 1st of February. This would be over and above the GST which already exists.  ITC lost Rs 54.15 or 13.39% to close at Rs 350.15. The impact of this fall would translate to about 450 points on BSESENSEX. If one were to take this into account, even BSESENSEX would have made a new intraday high. 

There was one mainboard IPO which listed during the week. Shares of Gujarat Kidney Hospital Limited which were issued at Rs 114 listed on Tuesday the 30th of December. The discovered price on BSE was Rs 120.75. They closed at Rs 104.65 on day one and lost marginally to close at Rs 102.90 on Friday, a loss of Rs 11.10 or 9.74%. 

The issue from Coal India Limited subsidiary, Bharat Coking Coal Limited would open at the end of the coming week. Price band and roadshow would be held in Mumbai on Friday. 

Markets have made a new high finally and this is even though there has been no news on geo-political side or trade deal between US and India. The most important news that can impact markets immediately is the coming to an end of the Russia-Ukraine war. This would automatically see tariffs on India halving from 50% to 25%. This would take care of a lot of uncertainty present in the markets. How soon can this happen? Your guess is as good as mine. On a more realistic note, the situation on the ground indicate that hostilities are likely to cease in the next 15 days or so as all the sponsors of Ukraine are now fed up of funding it. This could be a big trigger for the markets. Besides this, Union Budget is around four weeks away. 

With last week’s market moves, the trading zone has moved upwards. Support exists at levels of 26,000 and lower down at 25,800 points. Resistance is around 26,800 points and further up at levels of 27,000 points. Markets are not going to run away from these levels but they are going to have a grind upwards. The strategy would be to build on a portfolio with stocks which have performed on the financial front in the last few quarters. The government has signaled its intent with levying excise duty on tobacco and cigarettes with a one month notice that they would ensure growth post the budget. 

With the new high on indices, behind us, it’s time to concentrate on stocks in the market place. Trade cautiously.