The week gone by continued to be volatile and all gains built up during the course of the first four days were lost and even more, on Friday. The week ended with BSESENSEX losing 163.23 points or 0.43% to close at 37877.34 points while NIFTY lost 35.65 points or 0.32% to close at 11,178.40 points. The broader indices saw BSE100 lose 0.03% while BSE200 and BSE500 gained 0.03% and 0.18% respectively. BSEMIDCAP was up 1.51% while BSESMALLCAP was up 1.36%. This kind of difference where the benchmark indices are in the red and the broader indices are in positive, has happened after a very long time. Normally the trend is clear and all indices are either positive or negative, not some positive and some negative.

The Indian Rupee gained 3 paisa or 0.04% to close at Rs 74.90 to the US Dollar. Dow jones had a good week and gained 497.54 points or 1.81% to close at 27,931.02 points. The Indian indices gained on two days and lost on 3 days with Friday being the sharp loser and BSESENSEX losing 467 points and NIFTY 122 points. What is significant is the fact that markets were gaining and in the positive till Friday happened.

RBI has agreed to pay to the government Rs 57,128 crs as dividend for 2019-2020.

ICICI has successfully completed its QIP for Rs 15,000 crs at a price of Rs 358. Th share had closed at Rs 361.45 on Friday, a weekly gain of Rs 3.60 or 1.01%. Almost all the bigger private banks have done there fundraising in the last three to four months. They have enough muscle power on their balance sheet now to take care of any unforeseen circumstances on account of covid-19 or post pandemic in terms of slower recoveries. It may also be mentioned that BFSI sector accounts for just under a fourth of the NIFTY weightage, while in BSESENSEX it is slightly more than a fourth of the weightage.

The Supreme Court hearing the AGR matter in case of telecom companies has come to the issue of Reliance industries and Reliance Communications. The spectrum was allotted to the erstwhile telecom company which was a part of Reliance Industries and then was split when the family division happened. Post Reliance Communications going belly-up and exiting the telecom business, it entered into a spectrum deal with Jio. The Supreme court is asking for the payment of Rs 31,000 crs towards the spectrum dues. Readers would recall that Reliance Jio had taken over the assets and liabilities of Reliance Communications Limited at almost zero value as it had agreed to take over the liabilities as well. This could affect the share prices when trading begins on Monday. Shares of Reliance industries had closed at Rs 2,114 a loss of Rs 33 or 1.54% for the week when trading ended on Friday.

Shares of Yes Bank hit a high of Rs 17.16 before profit taking saw the share fall, and close at Rs 15.07, a weekly gain of Rs 0.93 or 7.39%. The share has now entered a trading zone and would move between 13.5-16 over the next couple of weeks till news flow about the performance of the bank post fund raising are known.

IHH, the Malaysian based company which had acquired Fortis Healthcare has proposed in the board meeting to change the name of the company to Parkway from the present name and disassociate itself from the Singh brothers in all manner. This proposed change is of course subject to regulatory approvals and the Supreme Court where there is a matter of the open offer also pending. As and when this issue is resolved, the company would have renamed itself with a brand which is operating in more than 10 countries and is predominantly a South Asian group of hospital chain. The share has been seeing steady accumulation on expectation of the open offer currently stayed by the Supreme Court being cleared. Shares had closed at Rs 135.80, down Rs 2.15 or 1.56%.

Coming to the covid-19 front, the world saw 218,24,807 patients, 7,73,032 deaths and 145,58,328 people recovering. In India there were 26,47,316 patients, 51,045 deaths and 19,18,076 people recovering. Compared to the previous week, the world saw 18,00,544 new patients, 39,037 deaths and 16,60,090 people recovering. This effectively meant that 92.12% of the patients added during the week have recovered overall. In India, there were 4,33,179 new patients, 6,579 deaths and 3,83,798 patients recovering. The recovery rate for the week was 88.60%. Decent improvement in the recovery rate and one hopes and prays that work on the vaccine which is on globally on a war footing fructifies.

The week ahead would see markets open on a weak note and Reliance is likely to be under pressure on the AGR news. Markets would face resistance at the previous week’s high of 38,556 points and 11,366 on NIFTY. Incidentally while BSESENSEX failed to cross the recent high of 38,617 points, NIFTY did cross 11,341 points. These levels would be difficult to cross currently and would become a resistance for the time being. On the downside we would find support at 37,000 on BSESENSEX and at 10,900 points on NIFTY if not earlier. The strategy would be to buy on sharp dips or wait for the fall.

Markets continued their volatile movement in the week gone by and managed to close with gains for the week. BSESENSEX gained 433.68 points or 1.15% to close at 38,040.57 points while NIFTY gained 140.60 points or 1.27% to close at 11,214.05 points. The broader indices saw BSE100, BSE200 and BSE500 gain 1.42%, 162% and 1.83% respectively. BSEMIDCAP was up 3.34% while BSESMALLCAP gained 4.97%. The midcap and Smallcap indices were helped in no small way by the relaxation in circuit filters by the exchanges on Friday where over 600 stocks were positively impacted. This would increase the volatility in this segment. The benchmark indices in the last week gained on two days, lost on one and were sideways on the remaining two days.

The Indian Rupee ended lower by 12 paisa or 0.16% to close at Rs 74.93 to the US Dollar. Dow Jones had a stellar week and gained a massive 1005.16 points or 3.80% to close at 27443.48 points.

RBI in its monetary policy review meet kept interest rates unchanged and stopped the series of rate cuts that it had been doing. The meeting also ended speculation on extending the moratorium which would end in August. It has however announced that lenders would be allowed to implement a one-time loan restructuring plan without any change in ownership, while classifying such exposure as standard assets. This would provide relief to borrowers whose cash flows have been strained due to the pandemic and the resultant lockdown effect.

Shares/units of Mindspace Business Parks listed on the bourses on Friday and gained 10.50%. REITS were issued at Rs 275 and closed the day at Rs 303.87. The issue had received excellent response and was subscribed 13 times. On listing day, the delivery percentage was as high as 88%, indicating that only delivery trades were initiated. This is an investment instrument and would attract investors looking to diversify from liquid investments including fixed deposits as the yield is better and they are currently largely tax free in nature.

Shares of Yes Bank were big gainers during the week and gained Rs 2.19 or 18.33% to close at Rs 14.14. Readers would recall that the bank had raised Rs 15,000 crs through a follow-on offer at Rs 12. There could be more movement possible in the stock but going forward it would become an actively traded stock simply because it would have such a large floating stock available.

There has been an announcement that 101 items of defence equipment will not be imported by India going forward. While this would give a big boost to the domestic manufacturers in the medium to long term, there would be no immediate impact as it takes time for approvals and production to be put in place. The stock market would however react immediately and a knee jerk rally in the manufacturers of such equipment is likely to see a sharp jump. Do not get carried away with the movement.

On the covid-19 front, the number of affected people globally has crossed the 20 million mark and increased to 200.24 lac people with 7.34 lac deaths and 128.98 lac people having recovered. In India we have 22.14 lac affected people with 44,466 deaths and 15.34 lac people having recovered. Compared to the previous week, the world has seen 17.89 lac new patients, 41,201 deaths and 14.53 lac people having recovered. In India we had 4.09 lac new patients, 6,305 deaths and 3.47 lac people recovering. The number of new patients in India has been increasing quite significantly and it is a cause of worry. It can be attributed to the increased testing that is happening in many places and also the increased unlocking of restrictions.

Markets are seeing a spate of fund raising where corporates and promoters are increasing their stake in the companies through fund raising and also improving the balance sheet. Rights issue or QIP issues are happening literally dime a dozen and issues get subscribed almost instantaneously. In the last week for example we saw Axis Bank and HDFC Limited raise large amounts of money. This highlights the fact that investment is happening in the market not only through secondary market but also through primary markets. Fund raising has become relatively easier and is happening in all earnestness. Liquidity is available and the system is flush with money. FPI’s with liquidity from the US are more than willing to invest in India even though markets worldwide are back to pre-covid-19 levels of March 2020.

Markets are poised at levels which are marginally lower than the highs made in the previous week of 38,617 on BSESENSEX and 11,341 on NIFTY. While these levels would act as strong resistances until they are crossed and taken out, the present levels could see volatile and sharp two-sided moves resulting in trading opportunities. A 500-600 point downwards on BSESENSEX and 150-200 points on NIFTY could act as strong supports on the downside. This could be a trading range for the week ahead. Having seen a strong rally over the last three to four months, its high time that markets consolidate before deciding on the next leg of its journey. Use sharp movement to your advantage and refrain from keeping overnight positions.