Markets began last week under tremendous pressure on the back of a massive surge in covid-19 cases. The stringent norms on movement of people imposed in Maharashtra which amounts to a night curfew and almost a day lockdown added to the woes. BSESENSEX lost 759.29 points or 1.53% to close at 48,832.03 points. NIFTY lost 217 points or 1.46% to close at 14,617.85 points. The broader markets saw BSE100, BSE200 and BSE500 lose 1.61%, 1.70% and 1.83% respectively. BSEMIDCAP was down 2.91% while BSESMALLCAP lost 2.68%. In sectoral indices there were no gainers with BSEMETAL losing the least at 0.31%. Incidentally in the previous week, BSEMETAL had gained the most.

Dow jones hit a new lifetime high of 34,257 points. It gained 417.30 points or 1.23% to close at 34,217.90 points, off its high. The Indian Rupee recovered some lost ground and gained 39 paisa or 0.52% to close at Rs 74.35 to the US Dollar.

Wipro declared its annual results which were virtually flat at Rs 50,299 crs versus 50,387 crs, a year ago. Net profit however was higher at Rs 10,060 crs versus Rs 8,680 crs. The one single item which made the major difference in expenses was travel costs which fell sharply from Rs 1,537 crs to Rs 436 crs, a saving of Rs 1,101 crs. This could be a saving on account of covid-19 and work from home protocol. The growth witnessed in the fourth quarter was 3.3% which gives a sense of comfort that things are getting back on track. Further this growth in fourth quarter helped the company to report almost flat revenues for the full year, which were negative at the end of the third quarter.

The low of the week was hit on Monday when the BSESENSEX cracked and touched 47,693 points. This violated the trading zone that we have been discussing in the last couple of weeks. The low on NIFTY was 14,248 points. The trading zone of 48,250-50,500 on BSESENSEX and 14,250-14,900 on NIFTY now looks as having broken and in the immediate short term one should expect only corrective rallies with a downward bias. Even though we had a short trading week with four sessions, the fall on Monday was enough to shake the markets. They gained on the next two days and were flattish on the last trading day.

The week ahead would see the listing of Macrotech Developers Limited which had raised Rs 2,500 crs through a fresh issue in the price band of Rs 483-486. Shares would list on Monday the 19th of April. Wednesday the 21st of April is a trading holiday and would break the market trading week like the previous week into two distinct and equal halves, with no momentum being built possible.

Covid-19 seems to be on a rampage and is registering a big rise in daily cases and also deaths. In India we are seeing a surge in many parts and strict regulation in local laws have been introduced to curb the spread of the virus. The world saw 14,19,99,954 patients, 30,32,865 deaths and 12,05,31,685 patients recovering. In India we saw 1,50,57,767 patients, 1,78,793 deaths and 1,29,48,848 patients recovering. Compared to the previous week, the world saw 53,63,662 new patients, 83,475 deaths and 1,06,66,673 patients recovering. In India we saw 15,32,288 new patients, 8,524 deaths and 7,95,135 patients recovering. The number of people who have been vaccinated in the country has crossed the 10 crore or 100 million mark. The rate of vaccination has stepped up and there is demand that it be opened up for all age groups. There would be a time lag before the same can happen as you need adequate stocks of vaccine.

The week ahead would see quite a few of the large companies which form part of the benchmark indices, declare their results. Many of the banks would be doing so. The previous week saw the three IT majors declare their results. Infosys announced a market buyback at a maximum price of Rs 1,750. A market buyback differs from a tender buyback wherein in the latter, an individual shareholder tenders his shares and in the former, the company buys from the market. What a market buyback does ensure is, that the market price if under pressure gats stabilised.

The week ahead would see markets trying to stabilise themselves. While covid-19 situation is worrisome and needs to be tackled head-on, it’s not as if all is lost. Economic activity cannot be shut down and state governments have to find a way out of the current situation without shutting down everything. This would keep markets guessing and therefore under pressure. It makes sense to remain light and allow markets to play out the week without getting over-committed. Use strong rallies to sell and sharp falls to add selectively. Markets would trade with a negative bias and a fall below the previous week’s low of 47,700 on BSESENSEX and 14,248 on NIFTY would bring severe pressure on them. Trade cautiously.

Markets were under pressure last week and failed to recover from the onslaught they faced on Monday because of rising covid-19 cases all over the country. They were marginally up on Tuesday, recovered ground on Wednesday, were again marginally up on Thursday and slipped on Friday. The week saw BSESENSEX register losses of 438.51 points or 0.88% to close at 49,591.32 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.04%, 0.22% and 0.39% respectively. BSEMIDCAP was up 1.20% while BSESMALLCAP was up 2.49%. The top sectoral gainer was BSEMETAL up 6.80% followed by BSEHEALTHCARE 5.56% and BSEIT 4.89%. The top loser was BSEBANKEX down 3.84%.

The Indian Rupee was under severe pressure and lost Rs 1.64 or 2.24% to close at Rs 74.74 to the US Dollar. Dow Jones hit yet another lifetime high of 33,811 before closing at 33,800.60 points, a gain of 647.39 points or 1.95% for the week.

RBI had its monetary policy review meet for the week between Monday the 5th of April and Wednesday the 7th of April kept policy rates unchanged on expected lines. The Repo rate would continue at 4.00% while reverse repo would be at 3.35%. Further the stance would continue to remain accommodative. Incidentally this was the fifth consecutive meeting where rates have remained unchanged.

Readers would be aware that Oriental Bank of Commerce and United Bank of India have been merged with Punjab National Bank. Post the merger two things have happened where the name of the bank has changed to Punjab National Bank and the first four letters of the IFS Code have been changed to read as PUNB. No other change in any numbers has been done. All bank account holders of the erstwhile Oriental Bank and United bank have to run from pilar to post in times of pandemic and change the KYC at various places whether it be trading accounts, bank mandates, insurance policies, demat accounts etc. it would be humbly requested to RBI that they pass a notification requesting all concerned to replace the name of the bank and the first four letters of the IFS Code and finish the formality. In case there is a change in code itself than the concerned individual may approach the bank. This simple notification would save lacs of account holders from untold misery. It may also be mentioned that the same would be happening in the case of Syndicate Bank, Corporation Bank, Andhra Bank and Allahabad Bank. One hopes RBI does look into the issue and oblige.

On the primary markets front we saw the issue from Barbeque Nation Hospitality Limited list on Wednesday the 7th of April. The discovered price was Rs 492 against the issue price of Rs 500. They then rose to hit the high of Rs 590.40 which was the upper circuit of the day and remained locked at that price. Incidentally the upper circuit was hit around 10.30 am in the morning and remained so. Very clearly the difference between the weighted average of Rs 559.37 on BSE and Rs 543.40 on NSE and their respective closing prices, indicate that the short sellers were caught on the wrong foot. The share rose further on the remaining two days of the week and closed at Rs 722.05, a gain of Rs 222.05 or 44.41 %.

The mega issue from Macrotech Developers Limited to raise Rs 2,500 crs from a fresh issue was oversubscribed 1.37 times. The price band was Rs 483-486. The QIB portion was subscribed 3.06 times, HNI portion was subscribed 1.45 times, Retail portion was subscribed 0.40 times while the Employee quota was subscribed 0.17 times.

Covid-19 is becoming worrisome and new mutants and strands seem to be emerging in different parts of the world. India has again crossed Brazil and is now the country having the second highest number of cases. The world saw 13,66,36,292 patients, 29,49,390 deaths and 10,98,65,012 patients recovering. In India we saw 1,35,25,379 patients, 1,70,209 deaths and 1,21,53,713 patients recovering. Compared to the previous week, the world saw 47,28,203 new patients, 83,473 deaths and 36,69,693 patients recovering. In India we saw 9,37,459 new patients, 5,077 deaths and 4,73,755 patients recovering. The rate of new patients has gone up alarmingly and its time that we as individuals step up our efforts to maintain social distancing at all times.

Maharashtra government is contemplating imposition of complete lockdown for about 10-15 days and would take a final decision on the same on Monday the 12th of April. Whether it does go for complete lockdown or a partial one, it is bound to upset the markets which are in any case very delicately poised. Readers would recall that markets had reacted last Monday quite sharply to the rising covid-19 cases. Either which way they are likely to be on tenterhooks till the outcome of the meeting is disclosed and then react depending on the outcome.

Markets have been fairly range bound between 48250-50500 on the BSESENSEX and 14250-14900 on NIFTY. Each time they come closer to either of these levels they seem to be reacting in the opposite direction. Very clearly for a change in trend or a bigger move, one needs to see markets move beyond these levels. The week ahead sees the three IT majors declaring their results. TCS on Monday, Infosys board meets on Tuesday and Wednesday and Wipro on Thursday. Wednesday is also a market holiday. This effectively divides the upcoming week into two equal halves of two days each which would make markets quite tentative and nervous. While the IT sector has gained considerable ground in recent times, particularly last week, the majors declaring results would give a direction to IT performance in the coming quarters and year. While IT, healthcare and metal seem to be on a roll, one is not sure how some of the other sectors would perform.

It makes sense to play safe in the coming week and not over commit in either direction. Levels mentioned above are quite crucial and once violated in either direction could see sharp moves. Stay light and use rallies to book profits. Hopefully, during the course of the week, markets would decide on a trend. In case we see markets falling very sharply say over 2%, selective buying may be initiated.