The week was led by gains made on Monday when we saw a strong gap up opening on account of the GST rejig that was announced during the extended weekend of the previous week. While markets rallied strongly through the week, a minor sell-off on Friday, erased almost all the gains made between Tuesday to Thursday. The week closed marginally higher than Monday’s close. This indicates that the big positive news of GST has been digested by the market. They gained on four of the five trading sessions and lost on one, Friday. BSESENSEX gained 709.19 points or 0.88% to close at 81,306.85 points while NIFTY gained 238.80 points or 0.97% to close at 24,870.10 points. BANKNIFTY lost 192.45 points or 0.35% to close at 55,149.40 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.13%, 1.22% and 1.36% respectively. BSEMIDCAP gained 2.03% while BSESMALLCAP gained 2.34%. The top sectorial gainer was BSEAUTO which gained a massive 5.06%. 

The Indian Rupee was volatile and closed virtually unchanged, gaining 2 paisa or 0.02% to close at Rs 87.51 to the US Dollar. Dow Jones was flat to negative for the first four days of the week and then on Friday, it sky rocketed gaining a massive 846 points. This propelled Dow to a new all-time high. For the week in which Dow gained on three of the five trading sessions and lost on two, Dow was up 685.65 points or 1.53% to close at 45,631.74 points. 

The main reason for the rally was the minutes of the FED meeting held July 29-30 were released. These indicate that FED could cut interest rates as early as in the meeting to be held in September, led to the sharp rally.

The primary markets would see as many as four listings on the main board happening this week. These are Vikram Solar, Patel Retail, Gem Aromatics and Shreeji Global. These issues would all list on Tuesday the 26th of August. For quick reference purposes, the allotted price of these issues would be Rs 332 for Vikram Solar, Rs 325 for Gem Aromatics, Rs 255 for Patel Retail and Rs 252 for Shreeji Global. 

The week ahead has a trading holiday on Wednesday the 27th of August for Ganesh Chaturthi, the day Lord Ganesh is brought home to millions of Indians. He will be prayed, revered, pampered for a period of 1 to 11 days before he would be immersed in the sea, river or even makeshift pond with full fanfare. It is an event which began in Mumbai but is now celebrated across the country. 

The mid-week holiday would upset trading for the week, particularly because the next day after the Ganpati holiday would be expiry day on Thursday the 28th of August. NIFTY in the August series has not done much and is up a mere 101.75 points or 0.41% at 24,870.10 points. The series had begun at a level of 24,768.35 points. With three days to go for expiry, the series is well and truly open and both the bulls and bears have an equal chance to take the series. It would be a close finish for sure. 

In global news, a lot is happening with Trump continuing to feel that India has cheated him of winning the Nobel Peace prize which seems to have become an obsession with him. This is translating into irrational comments and actions as far as trade with India is concerned. While a cursory miffed comment would be in place, continuing his tirade and expressing displeasure on something which he never did, has upset a relationship made over five different presidents of the US. He has achieved what would have been impossible for others to achieve, of breaking trust of being a reliable and trustworthy ally. He has also pushed India to aligning much closer with Russia and getting closer to China as well. Something that the US certainly did not foresee or desire. Anyway, the tongue is something which is difficult to control when you are as old as Trump is. It tends to slip.

Key levels for the markets on the upside are at 25,150-25,200 and higher up at 25,500 points around. One needs big news to break 25,200 and move to higher level. GST which could be a trigger is happening in the following week and the Russia-Ukraine settlement is moving further away with Ukraine attacking on Sunday (24th August) a nuclear power plant on the border with drones. There will be retaliation for sure and that would be bigger than what Ukraine did. On the support side, levels of 24,800 around would act as a pivot and level of 24,500 would act as support. 

The trading strategy would be to keep positions light in view of the mid-week holiday on Wednesday followed by Thursday’s expiry. There would be plenty of intra-day volatility to allow money making opportunities. It is also a good time to look at portfolio building. 

Trade cautiously.

The week gone by had a trading holiday on Friday on account of India celebrating its 79th Independence Day on Friday the 15th of August. It was one where there was lot of expectancy on the geo-political front as well. While it could be termed as work in progress, nothing dramatic or really positive happened. At the end of trading, markets gained on three of the four trading sessions and lost on one. BSESENSEX gained 739.87 points or 0.93% to close at 80,597.66 points while NIFTY gained 268 points or 1.10% to close at 24,631.30 points. BANKNIFTY gained 336.95 points or 0.61% to close at 55,341.81 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.13%, 1.08% and 1.07% respectively. BSEMIDCAP gained 0.92% while BSESMALLCAP was up 0.37%. 

The Indian Rupee gained 17 paisa or 0.19% to close at 87.53 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It was up 770.51 points or 1.74% to close at 44,946.12 points. Dow is a little over 100 points away from its lifetime high which is at 45,073.63 points made on 4th December 2024. The Putin-Trump meeting at Anchorage in Alaska was not an outcome which the street was expecting. With Zelenskyy and EU leaders to meet Trump in the US today (Monday), markets will be kept on tenterhooks. 

As far as India is concerned, the news to rejig GST rates is big news for the markets. The 12% and 28% tax rates are proposed to be scrapped. While the rational for doing the same is great, there could be opposition from the opposition states as their share of collection would go down. The opening rally would be great for the markets but there could be a setback when the GST council meets in the latter half of the week on Thursday. 

On the flip side, the proposed trade talks between India and the USA have been called off and no new date has been announced as of now. This could be a short term dampener for markets after a strong rally. 

We had two IPOs listing on Thursday the 14th of august. The first was JSW Cement Limited which had issued shares at Rs 147. After the discovered price of Rs 153, the share lost its way and closed lower at Rs 146.05, a loss of Rs 0.95 or 0.65%. 

The second share to list was All Time Plastics Limited which had issued shares at Rs 275. The discovered price was Rs 314.30 but the closing price was Rs 283.25. The gain was Rs 8.25 or 3%. It could be said that the listings were subdued and somewhere or the other there is a fatigue factor in the primary markets which seems to be setting in. 

The week ahead has a spate of public issues with four issues opening on Tuesday the 19th of August and closing on Thursday the 21st of August. The first is from Vikram Solar Limited, followed by Gem Aromatics Limited, Patel Retail Limited and Shreeji Shipping Global Limited.  

Coming to the markets in the week ahead, expect them to open with a huge gap up opening. Whether they are able to gain further would be an important issue. The sustaining of the gap-up opening would be dependent on global cues coming from Trump-Zelenskyy meeting and rapid developments thereafter. There would be hope that the additional tariffs on India may not be imposed. Expect strong support at levels of 24,200-24,300 on NIFTY and resistance at 25,200 or thereabouts. This would be a good trading week for people looking to make short term gains. 

The key events would be two-fold. Firstly, tariffs which are linked to the Russia and Ukraine war and therefore India as we are close to Russia and secondly, the impact of GST changes once they are approved in course of time in the GST council. Both would have far reaching consequences on the markets. Take it as the news comes. Importantly, it’s all work in progress, with nothing finalized. 

Trade very cautiously.