The week gone by saw markets rise on hope and expectation that things on the tariff front would improve. It does not necessarily happen so. On expected lines, the Nobel Peace Prize did not go to Trump. It went to Maria Corina Machado, a Venezuelan. One would have thought that India would have borne the brunt of the fallout, but it was China. Effective 1st November, a 100% additional tariff has been imposed on China. This has been done because China has put restrictions on the export of rare earth to countries in turn re-exporting products and rare earth products to the USA. What happened post this announcement was a massive fall on Friday of 878.82 points or 1.90% on the Dow. Ramifications of what Trump did on Friday late evening Indian time would be felt globally when markets open post the weekend. 

BSESENSEX gained on four of the five trading sessions and lost on one. It was up 1,293.65 points or 1.59% to close at 82,500.82 points while NIFTY gained 391.10 points or 1.57% to close at 25,285.35 points. The broader indices saw BSE100, BSE200 and BSE500 gain 1.53%, 1.41% and 1.29% respectively. BSEMIDCAP gained 1.50% while BSESMALLCAP was up a mere 0.01%. The top sectorial gainer was BSEIT which was up 4.28%. 

The Indian Rupee gained 13 paisa or 0.15% to close at Rs 88.64 to the US Dollar. Dow Jones was already under pressure during the week and then Friday happened. It lost 1,278.68 points or 2.73% to close at 45,479.60 points. Dow lost on all five trading sessions with Wednesday being virtually flat, with a net change of -1.20 points. 

Primary markets are seeing issues opening and closing as if there is no tomorrow. Of the five issues which listed last week, three are trading below issue price while just two are above the issue price. Similarly of the ten issues to have listed from the 1st of October, six are trading below issue price and just four are above par. Sad state of performance. Very clearly there is a fatigue factor in the market. Yet the issue of L G Electronics India Limited saw a new benchmark being set when the issue saw subscription of Rs 4 lac crores. Tremendous liquidity no doubt. Tata Capital Limited would be listing on Monday while L G Electronics would be listing on Tuesday. The best that could be expected from Tata Capital is a muted listing and I am sure nobody would be more than happy if the issue closes above the issue price of Rs 326. In the case of LG, there is euphoria and the premium had touched as high as Rs 425 and is currently around Rs 370. It is widely believed that the share would open strong with gains of Rs 300 or thereabouts. 

Currently the issues from Rubicon Research Limited, Canara Robeco Asset Management Co Ltd and Canara HSBC Life Insurance Company Limited are open. The issue from Midwest Limited would open on Wednesday the 15th of October and close on Friday the 17th of October. 

Diwali Muhurat trading will take place on Tuesday the 21st of October for one hour. Wednesday would be a trading holiday. 

The week ahead would be volatile and choppy. The relationship between PM Modi and Donald Trump seems to be getting back on track after Trump realised that the Nobel Peace Prize was never going to be his. He has now gone after China. Will the trade talks with India conclude right away? Seems unlikely. One should hope that before 2025 ends, we are able to conclude them. Expect some turns and twists before they conclude as the man at the top is confused big time. 

Levels of 25,300 have held their ground. They look like again acting as resistance as markets look to find support all over again at lower levels of say 24,800-850. With each attempt at crossing 25,200-300 failing, the level would become tougher to cross. Results season has begun and even though BSEIT was the top sectorial gainer last week, the only IT result declared was that from TCS and it left a lot to be desired. The share has since the beginning of the calendar year lost about Rs 1,060 to close at Rs 3,028. Not a very happy state to be in. Results would be the key and they don’t seem to augur well. Current geo-political scenario seems confusing and stressful. This is even though there seems to be some sort of peace emerging on the GAZA front. In such a scenario it makes sense to lie low and allow markets to run their course. 

Trade cautiously.  

The week gone by had a holiday on Thursday and also had NIFTY monthly futures expiring on Tuesday instead of the traditional Thursday that we have always come to associate the product with. Markets in India gained on two of the four trading sessions and lost on two. At the end of it all, BSESENSEX gained 780.71 points or 0.97% to close at 81,207.17 points, while NIFTY gained 239.55 points or 0.97% to close at 24,894.25 points. BANKNIFTY gained 1,199.90 points or 2.21% to close at 55,589.25 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.11%, 1.26% and 1.38%. BSEMIDCAP gained 2.08% while BSESMALLCAP gained 2.09%. Almost the entire weekly gains came on Wednesday, the 1st October when the new monthly futures series began with BSESENSEX gaining 714 points and NIFTY gaining 225 points. 

The Indian Rupee lost 5 paisa or 0.06% to close at Rs 88.77 to the US Dollar. Dow Jones gained on all five trading sessions of the week. It was up 510.99 points or 1.10%. The Nobel Peace Prize for which Donald Trump has staked his claim and has put at stake geo-political stability will be announced on Friday the 10th of October. While Trump is nowhere in the picture, hopefully after being in a sour mood on losing out, things should start improving. Currently the US government is in a shutdown having exceeded its borrowing limits. How long the shutdown would last is anybody’s guess but what is happening is ugly. USA citizens are beginning to face the brunt of tariffs introduced. 

September futures expired on a slightly negative note in the expiry week. On an overall basis, the bulls just managed to pull of the series with gains of 110.20 points or 0.45% to close at 24,611.10 points. The series had begun at 24,500.90 points. 

The primary market mad rush of IPOs continues unabated. We had as many as 11 listings in four days last week. What shows fatigue factor is that of these 11 issues, five closed in negative within the first week. Of the six that closed positive, two of them were up less than 1% at 0.50% and 0.64% respectively. Very clearly, the going is getting tougher and tougher. One more very important factor is the so called ‘GMP’ or grey market premium which is referred to by investors before applying is failing them. Premiums of 35-40% disappear post closure of issue. Time to become cautious.

In terms of present issues which are open, we have one from Wework India Management Limited which opened last Friday and would close on Tuesday the 7th of October. The company is looking to raise Rs 3,000 crores from an offer for sale of 4.62 crore shares in a price band of Rs 615-648. The company is into the co-working and shared office space, of which we have seen as many as three issues over the last couple of months. 

The second issue is from Tata Capital Limited which comprises of a fresh issue of 21 crore shares and an offer for sale of 26.58 crore shares in a price band of Rs 310-326. This price came way below the unlisted price which traded as high as 1,100+ at the beginning of the year. Its high time investors become cautious as this is the third consecutive offering in recent times on the main board where the issue price is way below the unlisted price. The two other issues were NSDL and HDB Financial Services Limited. Tata Finance is an NBFC and a decent name in the lending space present across verticals. It would be the third largest AUM at 2.33 lakh crore after Bajaj Finance and Shriram Finance. The present NAV of the company is at Rs 82 as of 30th June which would improve to Rs 96.4 post the issue happening at the top end of the price band. 

The third and final issue is from LG Electronics India Limited which is tapping the markets with its offer for sale of 10.18 crore shares in a price band of Rs 1,080-1,140. The issue would open on Tuesday the 7th of October and close on Thursday the 9th of October. This would be the second South Korean company to list on the Indian bourses. Earlier, Hyundai Motors had listed on 22nd October 2024. This listing would happen on 14th of October, roughly eight days before the first anniversary of Hyundai’s listing. 

RBI in its monetary policy meeting held in the beginning of the week decided to keep interest rates unchanged. GST collection for September25 was at Rs 1, 89,000 crores, higher than the Rs 1, 86,000 crores in August 25. There has been a substantial reduction in GST rates from 22nd September and ever since the rate cut was announced in August, there was a destocking witnessed. Actual numbers to see for impact would be for October when it would reflect the growth in consumption post GST rate cut. 

Coming to the markets in the week ahead, expect them to remain volatile. It is still awaiting direction and news flow which could come from quarterly results. On the tariff front, it appears USA has drawn itself into a corner and is stuck with its stand. It will have to find a serious way out of this mess it finds itself in. Probably the weekend would see realization once the Nobel awards are announced. The strategy would be to lie low, await results and then look at rebuilding one’s portfolio. Results this time could be interesting as prudent managements are expected to talk about not only tariffs, but also GST impact. Levels of 24,900 on the upside mentioned last week held and acted as resistance. For this week they would move upwards to 25,100-200 levels and immediate support at 24,500. Choppy markets and tough volatile conditions is what should be the undertone. 

Trade cautiously.