The week gone by had four trading sessions and markets were in a buoyant mood, notwithstanding border and cross border tensions. Markets gained on three of the four sessions and lost on one. Friday was the surprise package where after the initial euphoria, all thought that markets would slip or give way. They held on resolutely and ended with small gains and off their intraday highs. BSESENSEX gained 1,289.46 points or 1.63% to close at 80,501.99 points while NIFTY gained 307.35 points or 1.28% to close at 24,346.70 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.10%, 1.01% and 0.77% respectively. BSEMIDCAP gained 0.42% while BSESMALLCAP lost 1.33%. The benchmark indices were helped in a great way by the gains made by Reliance Industries which gained Rs 122 or 9.38% to close at Rs 1,422. 

The Indian Rupee gained sharply and was up 91 paisa or 1.07% to close at Rs 84.53 to the US Dollar. Dow Jones gained on all four trading sessions of the week and was up 1,203.93 points or 3.00% to close at 41,317.43 points. New jobs data fueled the fire. No clarity on Trump’s tariff has emerged so far and we are a month into the announcements made on 2nd April. 

Its been a very long time since one saw Reliance gain close to double digit percentage gains in the week. It gained a massive 9.38% for the week and closed at Rs 1,422 and helped the benchmark indices gain momentum. The move past 24,500 on Friday which was retraced could also be on the back of Reliance’s strong uptick. The highs made by BSESENSEX were at 81,177.93 points while on NIFTY it was at 24,589.15 points. These would be first resistances that the market would have to surmount on its way upwards. 

Results season continues to be a mixed bag with a few decent results and a large number of average and not so good results mixed together. Suffice to say that the big jump from results which is expected every quarter from results season is missing so far. Whether there would be a change in the remaining period of May, till results are to be announced is yet to be seen. 

India’s negotiations on the tariffs are set to happen shortly. Some of the areas would remain contentious particularly agriculture and that would be something which the US would have to look into seriously on a couple of fronts. Firstly, land holdings in India are miniscule when compared to the US and to compare subsidies and benefits are just not possible. The use of genetically modified seeds is permitted in the US while largely restricted in India. Similarly in the dairy segment India has grown in leaps and bounds and state cooperatives have been able to provide marketing and processing platforms to the large number of small farmers. I believe that the broad contours of the trade pact would get resolved in May and some pain points remain for further discussion. This would have a long term impact on our economy and also the markets. New companies and sectors would come on the radar based on these discussions. 

Coming to the markets in the week ahead, expect volatility to continue as rumor mongers create war hysteria across the border. Key levels to watch out for would be 24,500 on NIFTY which would act as a pivot and the highs made on Friday act as immediate resistances. Thereafter the next level would be 24,800-24,850 on NIFTY and 82,000-82,200 on BSESENSEX respectively. On the support side levels made on the previous Friday (25th April) at 78,605 and 23,847 would act as strong supports. On a broader note, the trading range until violated on either side would be between 24,000-24,500 on NIFTY. Keep in mind that the reserves and strength of Reliance, ICICI Bank, HDFC Bank and the entire IT pack have been used up in this rally so far. For any further rally we need numbers or news to fire up markets. 

The strategy would be to continue to look at large caps and only a select few from the midcap and Smallcap space. Keep overnight trading positions on the lighter side unless they are properly hedged and weekend positions should be avoided. Investment bets should be encouraged in view of trade talks which would happen sooner than later. 

Trade cautiously.

Last week was one of two distinct halves with the first which saw the market momentum continue and markets gain, followed by the second half which saw markets fall and give up some of the gains of the week. Incidentally we had a full five trading sessions and markets gained on three of the five trading sessions consecutively. BSESENSEX gained 659.33 points or 0.84% to close at 79,212.53 points while NIFTY gained 187.70 points or 0.79% to close at 24,039.35 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.72%, 0.76% and 0.73% respectively. BSEMIDCAP gained 1.31% while BSESMALLCAP was up 0.12%. The intraweek high made on Wednesday on BSESENSEX was at 80,254.55 points whilst it was at 24,359.30 points on NIFTY. The lows made on Friday were at 78,605.81 points while they were at 23,547.85 points on NIFTY. 

The Indian Rupee lost a tad, losing 7 paisa or 0.08% to close at Rs 85.44 to the US Dollar. Dow Jones had a comeback after reassuring moves from Donald Trump that there would be no action taken against Jerome Powell, the FED Chairman and the change in stance on the tariff front. While tariffs are yet to be announced by any country as yet, there seems to be some rationality on the American side coming in. This saw the US markets gain on four of the five trading sessions and lose on one. Dow gained 971.77 points or 2.48% to close at 40,113.50 points. 

Results season continues with no stellar results so far. Reliance Industries declared a good set of numbers which reflected benefits of falling crude oil prices and also deployment of its resources in various business which have begun to bear profit. Not sure whether the results have the power to carry the markets upwards on its shoulders going forward. 

Friday broke the momentum of the markets when it became clear that there would be a response to the terrorist attack in Pahalgam. The low of Friday is mentioned and this would become key support levels for the markets in the immediate terms. 

Thursday saw April futures expire on a quite note. After all the action through April, expiry was a low-key affair and NIFTY lost 86 points on expiry day. April series saw NIFTY futures gain 650.75 points or 2.76% to close at 24,242.70 points 

The lull in mainboard IPOs is being broken with the issue from Ather Energy Limited after two and a half months. Ather is tapping the capital markets with its fresh issue and offer for sale issue which would open on Monday the 28th of April and close on Wednesday the 30th of April. The fresh issue is for Rs 2,626 crores and the offer for sale consists of 1,10,51,746 equity shares in a price band of Rs 304-321. The company is a manufacturer of EV-2 wheeler and is currently manufacturing the same from its facility in Hosur, Tamil Nadu. The company proposes with the fresh issue proceeds to set up a new unit in Maharashtra. The company reported losses for the year ended March 24 and hence there is no PE multiple. 

This company has Hero, the listed ICE make of scooters and motorcycles as its principal investor and would continue to have an approximate 31% shareholding post the listing of the issue. This company started much before Ola and was already delivering electric scooters when Ola Electric took shape. The sales of Ather in comparison to Ola is about 40% of what Ola does and they have a long way to catch up. Currently the company is loss making and the path to profitability is not spelled out. With multiple trading and investment opportunities in a volatile market available, retail investors would look to give this issue a miss at IPO stage and look post price discovery on listing. In any case, the grey market premium is nothing to talk about and indicates a lukewarm listing. 

Coming to the markets which have a trading holiday on Thursday the 1st of May, expect them to remain volatile and choppy. Clarity on Trump and tariffs will help market volatility to subside. Tension closer home on the Indo-Pak front would be centerstage as one would expect some clarity and action on what happened. Till this is done and dusted it would remain a hanging sword on the neck of the markets. 

Key supports for the markets are the lows made on Friday in the markets at levels of 78,605.81 points and 23,547.85 points. If these are breached, next levels would be at 77,000-77800 on BSESENSEX and 23,000-23,300 on NIFTY. This is being given as a band as we could see this acting as a support on many occasions going forward. In terms of resistance, these exist at levels of 24,500 on NIFTY and at 80,700 on BSESENSEX. 

Last week saw the IT sector rally very strongly led by Tech Mahindra and HCL. While Banking was in the forefront initially it seems to be getting ready for corrections after having started this sharp rally where Bank NIFTY has made a new lifetime high. The strategy for the week would be to continue to trade in large cap stocks and an individual list of stocks where you are comfortable in the midcap and Smallcap space. Keep overnight positions low as there could be sharp overnight moves in either direction. 

Trade cautiously.