Markets were on a roll during the last week and the volatility seems to have reduced. The change visible was the fact that they just rose and are moving towards a nice set-up where they could go in either direction. With last week’s moves they are within striking distance of new lifetime highs. The broad markets more than regained the previous week’s losses. BSESENSEX gained 1,341.47 points or 1.85% to close at 74,005.94 points while NIFTY gained 446.80 points or 2.03% to close at 22,502.00 points. The broader markets saw BSE100, BSE200 and BSE500 gain 2.40%, 2.91% and 3.23% respectively. BSEMIDCAP was up 4.92% while BSESMALLCAP was up 5.65%. Markets gained on five of the six trading sessions during the week. They were open on Saturday as well with a view to test the disaster recovery site which the exchanges have. 

The Indian Rupee gained 16 paisa or 0.19% to close at Rs 83.34 to the US Dollar. Dow Jones continued its strong showing and crossed the 40K mark. It gained on three of the five trading sessions and lost on two. It was up 490.95 points or 1.24% to close at 40,003.59 points. 

There were three listings during the week. The first was Indegene Limited which had issued shares at Rs 452. The share made its debut on Monday at BSE at Rs 659.70, a gain of Rs 207.70 or 45.95%. It then made a low of Rs 527.80 and closed at Rs 570.65. On NSE, it debuted at Rs 655, on debut day, made a low of Rs 527.10 and closed at Rs 570.90, a gain of Rs 118.90 or 26.30%. By Saturday, the share lost further ground and closed at Rs 556.05, a gain of Rs 104.05 or 23.02%. 

The second share to list was TBO TEK Limited which had issued shares at Rs 920. The share debuted at Rs 1,380 on BSE and at Rs 1,426 on NSE. It closed on Wednesday, debut day at Rs 1,404.85, a gain of Rs 484.85 or 52.70%. On NSE, the close was at Rs 1,406.30. The share gained further ground and closed at Rs 1,463.90, a gain of Rs 543.90 or 59.12% on Saturday. 

The third share to list was Aadhar Housing Finance Limited which had issued shares at Rs 315. The debut price was 314.30 on BSE and Rs 315 on NSE. The low the share made was Rs 293.35 on BSE and Rs 292 on NSE. The high was Rs 343.20 on BSE and Rs 343.70 on NSE. The share closed on Wednesday at Rs 329.55, a gain of 14.55 or 4.61%. By Saturday, the share gained marginally and closed at Rs 348.60, a gain of Rs 33.60 or 10.67%. 

The issue from Go Digit General Insurance Limited which had tapped the markets during the week saw the issue get overall subscribed 9.6 times. The price band was Rs 258-272. The QIB portion was subscribed 12.56 times, HNI portion was subscribed 7.24 times and Retail portion was subscribed 4.27 times. There were 5.85 lakh applications in all. 

The week ahead has two trading holidays and would therefore have just three trading sessions. The week begins with a holiday on account of voting for the 5th round of elections to be held on Monday amongst other places in Mumbai. This would be followed by a holiday on Thursday as well. This would break the momentum which one saw being built up during the previous week. 

Post the week, we would have entered the business end of the general elections with just the sixth and seventh rounds left. The final round is on the 1st of June which is Saturday. That evening, we would be bombarded by exit polls of all colors and hues and markets would get a fair sense of what results would be like on Tuesday when they are finally declared. As at the time of writing, the markets very firmly believe that the ruling dispensation would win the elections and have a consecutive third term. The ruling party which had won 303 seats in the 2019 elections, is expected to win around 330 seats and the allies another 45-50 seats. This is what the markets are believing and that gives the strength and momentum being witnessed. This would get fine tuned as the week ahead progresses. 

Coming to the markets in the short three-day period ahead, expect markets to remain volatile and choppy. We have immediate support at the lows made over the last month at 21,800-21,900 on NIFTY. While they look far away currently, a week ago they were almost there. On the resistance side with just a three-day week, all time highs of 22,800 points would act as strong resistances. 

The strategy for the week would be to enter select midcap and small cap stocks which have had good results for the quarter and year ended March 2024. Markets are on a strong wicket and with institutional players either long or short, there would have to be some sort of reversal of roles from FPIs sooner or later. Domestic institutions because of very strong domestic flows would have to continue to invest in the near term. 

In conclusion, the climb upwards will be slow but certainly there. This bull run is unlikely to end very shortly even though there would be profit taking at every level. 

Trade cautiously.

Markets had a crazy week and were under pressure throughout. They fell on expected lines and this time we could not blame the US markets as they gained on all five trading sessions. What happened is a blessing in disguise as it has cooled of the markets, even though Mumbai is having sweltering heat currently. BSESENSEX lost 1,213.68 points or 1.64% to close at 72,664.47 points while NIFTY lost 420.65 points or 1.87% to close at 22,055.20 points. The broader markets saw BSE100, BSE200 and BSE500 lose 1.83%, 2.04% and 2.25% respectively. BSEMIDCAP lost 3.27% while BSESMALLCAP lost 3.80%. In what could best be described as an unusual situation, markets lost on two trading sessions but were flat on the remaining three sessions. Just an instance to point out the flatness was NIFTY closing at unchanged levels down to two decimal points on Wednesday at 22,302.50 points compared to Tuesday. I do not remember any other instance in recent times when the levels have remained identical like this. 

The Indian Rupee lost 8 paisa or 0.10% to close at Rs 83.50 to the US Dollar. Dow Jones had a stellar week and gained on all five trading sessions of the week. It was up 836.96 points or 2.16% to close at 39,512.64 points. 

The week gone by saw three IPOs open and close for subscription. The first was Indegene Limited which had issued shares in a price band of Rs 430-452. The issue was open from Monday the 6th of May to Wednesday the 10th of May. The issue was subscribed an overall 70.26 times with QIB portion subscribed 192.72 times, HNI portion subscribed 55.84 times and Retail portion subscribed 7.8 times. There were 27.80 lakh applications in all. 

The second issue was from Aadhar Housing Finance Limited which was open from Wednesday the 8th of May to Friday the 10th of May. The price band was Rs 300-315. The issue was subscribed 26.76 times overall with QIB portion subscribed 76.42 times, HNI portion subscribed 17.33 times and Retail portion subscribed 2.58 times. There were 16.38 lakh applications. 

The third issue was from TBO TEK Limited which was open from Wednesday the 8th of May to Friday the 10th of May. The price band was Rs 875-920. The issue was subscribed 86.68 times overall with QIB portion subscribed 125.51 times, HNI portion subscribed 50.51 times and Retail portion subscribed 25.65 times. There were 23.75 lakh applications. 

The week ahead sees one IPO from general insurer, Go Digit General Insurance Limited. The issue opens on Wednesday the 13th of May and closes on Friday the 15th of May. The issue consists of a fresh issue of Rs 1,125 crores and an offer for sale of 5,47,66,392 equity shares in a price band of Rs 258-272. The company is promoted by Prom Watsa of Fairfax. 

The company helps in customizing products as required in the general insurance space. It became profitable in Fy22-23 and has built on the same in the current nine months ended December 23. The valuations based on current nine months are attractive and offer scope for appreciation on listing as well as for people with a minimum, medium term holding period. 

Markets on Thursday, made the intraweek lows at 72,334.18 points on BSESENSEX and at 21,932.48 points on NIFTY. These were higher than the lows made on 19th April at 71,816.46 points and 21,777.65 points. 

The fourth round of voting out of seven phases would be held on Monday the 13th of May followed by the 5th round the following Monday. Volatility has increased in line with the significance of the event and is further borne out by the fact that FPIs have sold close to Rs 30,000 crores in the current month which has been counterbalanced by domestic institutions who have spent their entire kitty of record SIP inflows for the month. 

Coming to the markets in the week ahead, while support exists at the lows made on Thursday and the previous lows made on 19th April, even if they are broken, support exists around 21,500 on NIFTY and at 71,650 points on BSESENSEX. On the upside hurdles exist around 22,450-500 and at 73,900 points on BSESENSEX. These levels need to be broken and sustained for any further up move. Expect markets to trade in a narrow range till then. 

The trading strategy for the coming week would be simple. Sell on rallies and expect markets to trade in a broad range. Volatility would increase if the levels on either side whether lower or higher are likely to be breached. Trading opportunities will exist and allow the disciplined trader to make money. 

Trade cautiously.