The short, truncated three-day week was eventful and dramatic. It was the end of the week, month, March futures expiry and also the end of the financial year 2023-2024. Call it bear trap, NAV propping exercise, year end flourish, we had a super volatile Thursday to sign of the year in style. Markets gained on two of the three trading sessions and lost on one. At the end of the short and eventful week, BSESENSEX gained 819.41 points or 1.13% to close at 73,651.35 points while NIFTY gained 230.15 points or 1.04% to close at 22,326.90 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.33%, 1.34% and 1.33% respectively. BSEMIDCAP gained 1.34% while BSESMALLCAP was up 0.92%. 

The Indian Rupee gained 2 paisa or 0.02% to close at Rs 83.40 to the US Dollar. Dow Jones gained on two of the four trading sessions and lost on two. Dow was up 331.47 points or 0.84% to close at 39,807.37 points. 

Thursday, the 28th of March was the last trading day of the financial year 2023-2024. It was also the day when March futures expired. This increased the volatility and one saw the effect of the same on the markets. NIFTY made an intraday high of 22,516 points and closed at 22,326.90 points. This meant that NIFTY lost 190 points from the high of the day. NIFTY had gained on a net basis 203 points. Similarly, the intraday high on BSESENSEX was 74,190 points while it closed at 73,651.35 points. This meant that BSESENSEX lost 540 points from the high of the day. BSESENSEX had gained 655 points on a net basis.

Coming to the quarterly performance of the benchmark indices, one finds that the net change during the quarter January to March 2024 was a fairly quiet one. BSESENSEX gained 1,411.09 points or 1.95% while NIFTY gained 595.50 points or 2.74%. BSEMIDCAP was up 2,482.96 points or 6.74% while BSESMALLCAP was up 492.58 points or 1.15%. 

For the financial year 2023-2024 the gains have been spectacular and even though the current quarter was nothing great, the overall number is impressive. It may be also mentioned that the quarter January to March 23 (previous year) was negative and one saw the indices lose ground. BSESENSEX lost about 3% while NIFTY lost around 4%. Even the midcap and small cap indices lost about 5% and 7%. As a result, the annual gains were 24.85% on the BSESENSEX, 28.61% on NIFTY, 63.40% on BSEMIDCAP and 60.13% on BSESMALLCAP. 

A question in the form of food for thought is, would financial year 2024-2025, see similar or near about similar gains? Without going into discussion, suffice to say that the year ahead would be tough and trying to match the benchmark returns of last year would be near impossible. 

Expiry of March futures was on a positive note with the series gaining 344.10 points or 1.57% to close at 22326.90 points. More than 60% of the monthly or series gains came on the last day when NIFTY gained 203 points on a net basis. 

The week ahead sees the offer for sale from Bharti Hexacom Limited tapping the markets with its offer for sale of 7.5 crore shares in a price band of Rs 542-570. The issue opens on Wednesday the 3rd of April and closes on Friday the 5th of April. The selling shareholder is Telecommunications Consultants India Limited (A govt of India undertaking) which owns 30% of the company. The balance shareholding is owned by Bharti Airtel Limited which is a listed entity. The company is in the business of providing communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in Rajasthan and the North East telecommunication circles in India which comprises the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. The services are offered under the brand ‘Airtel’, 

The shares are being offered at valuations which are between 12-15% cheaper than the same for Bharti Airtel Limited. While the business of the parent company and the company going public is not identical, it’s the best example available. The selling shareholder who is the government is selling half of its shares through this offering and would hold 15% of the equity post this issue. There is a six-month lock in for the remaining shareholders post the listing of the shares. I believe the government sooner than later would look to monetise the remaining shares and sell them post the price discovery of this issue. In that case, investors who apply for this issue and are allotted shares, may have an opportunity to become a part of Bharti Airtel the parent company, as the possibility of this company being merged with the parent is a very bright possibility. Shares of Bharti Airtel trade are trading virtually at new lifetime high at around Rs 1,230. 

The week ahead would see markets being volatile and choppy. While the sharp volatility of Thursday could best be explained as an aberration and something which is unlikely to be repeated, the benchmark has been raised. Markets would find it tough to remain at the elevated levels which they have reached. The stop loss for any long positions would be the lows made last week and earlier support of 21,900 points on NIFTY and 72,300 on BSESENSEX. These should be taken as key supports and any dip below these levels would see sharp sell-off in the markets. On the upside, Thursday took us to new territory on NIFTY and these are tricky waters to navigate. 

The strategy would be to sell on strong rallies and wait for a sharp correction to enter. The picks should be large cap and very select midcap and small cap stocks. 

Trade cautiously.

Markets in the week gone by were volatile and choppy. Traders and investors were shaken looking at the intraday volatility, where markets opened positive and then turned negative and vice versa. At the end of the week, they gained on four of the five trading sessions and lost on one. The net change saw BSESENSEX gain 188.51 points or 0.26% to close at 72,831.94 points while NIFTY gained 73.40 points or 0.33% to close at 22,096.75 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.57%, 0.73% and .84% respectively. BSDEMIDCAP gained 1.44% while BSESMALLCAP was up 1.81%.
A sample of the volatility is given below where BSESENSEX gained 105 points on Monday, 89 points on Wednesday, 540 points on Thursday and 190 points on Friday. It lost 736 points on Tuesday. This brings us to total gains on five days of 924 points and a loss of 736 points. Against this, the daily swing which is the difference between the intraday high and low was much higher. On Monday it was 671 points, Tuesday was 557 points, Wednesday it was 728 points, Thursday it was 466 points and on Friday it was 943 points. Total intra week volatility was at 3.365 points against a net change of a mere 188 points. This clearly shows that markets seem to have lost the trend and are drifting in either direction, which is indicative of even sharper moves in the coming time.
The Indian Rupee lost 54 paisa or 0.65% to close at Rs 83.42 to the US Dollar. Dow Jones gained on four of the five sessions and lost on one on Friday. At the end of the week, Dow Jones gained 761.13 points or 1.97% to close at 39,475.90 points. The US FED in its meeting kept interest rates unchanged in a band of 5.25% to 5.50%. This is the fifth straight time that interest rates have been kept unchanged. Post the meeting, indications remain strong that there will be three rate cuts later in the year, an expected event which is not allowing markets to fall in the US. On Thursday and Friday some of the IT giants issued profit warnings which caused the Dow to dip sharply on the back of the IT stocks.
In India too we had the repercussions and the IT sector was under tremendous pressure. It was the biggest weekly loser and was down 5.54%. Stocks like Infosys were down 7.71% and TCS lost 7.22%.
In primary market news we had one listing during the week and as far as the main board is concerned, curtains have been drawn for the financial year 2023-2024. There are no more issues for the year and a couple of issues are expected in the first week of April 24. There was one listing during the week when shares of Krystal Integrated Services Limited listed on the bourses on Thursday, the 21st of March. The company had issued shares at Rs 715. The listing price was at Rs 795, and the low of the day was at Rs 703.05. The share closed day one at Rs 712.30, a loss of Rs 2.70 or 0.37%. It lost marginally more on Friday and closed at Rs 710.40, a loss of Rs 4.60 or 0.64%.
The week ahead is a very short and truncated week with a mere three days of working. There are trading holidays on Monday and Friday and this would mean that the futures would expire on Thursday the 28th of March, which would also be the last trading day of the year. The current value of NIFTY is at 22,096.75 points which is a mere 113.95 points or 0.52% higher than the March series open at 21,982.80 points. With three trading sessions to go, and such a volatile market, the series is clearly up for grabs and can go in any direction. If the bulls slip up, they could see the series being lost in next to no time. Expect markets to be super volatile over the next three days which would culminate in the end of the series as well.
Markets were under pressure and for a brief period of time seemed to have broken crucial supports at 21,825 points on NIFTY. The lows made were at 21,710 points on NIFTY and at 71,674 points at BSESENSEX. These levels would act as support if there is any further weakness in the markets going forward. Further, the next level of support would be at 21,500 points on NIFTY and at 71,100 points on BSESENSEX.
The strategy for the short three-day week would be to remain light and ensure that no major exposure remains when trading ends for the week, month and year on Thursday, the 28th of March. Use rallies to sell and look at sharp dips to buy in the large cap space only. The current concern about midcap and small cap space remains as of now. In short, its time over the next three days, not to be adventurous as the financial year 2023-2024 has been a good one for traders and investors in India. Hold on to your profits and don’t squander it away over the next three days, even if the offer looks too tempting.
Trade cautiously.