Markets began the week on a positive note and registered gains. They lost ground on the remaining three days of the week and ended with losses. BSESENSEX lost 476.14 points or 1.34% to close at 34,981.02 points. NIFTY lost 155.45 points or 1.46% to close at 10,526.75 points. The broader indices too saw losses of between 1.14% to 1.27% on the BSE100, BSE200 and BSE500.

The Indian rupee gained significant ground on the back of crude falling. Crude has fallen below the 60-dollar mark which is a one year low. The Rupee gained 1.25 Rs or 1.74% to close at Rs 70.67. Dow Jones lost 1,127.27 points or 4.44% to close at 24,285.95 points. On a year to date basis the Dow Jones is now down 1.75%.

The week ahead sees November futures expire on Thursday the 29th. The current value of NIFTY of 10,526.75 points means that the bulls have a lead of 401.85 points or 3.97%. It is enough for the current moment and gives the bulls the leeway to pull this series through. They can afford to lose a hundred points daily and still survive. Incidentally in the previous week they lost on three of the four trading days and were able to contain the losses at 155 points. This time around they have four trading days and 400 points to defend. Should be defendable.

The next tranche or Follow on Offer of the CPSE ETF opens for subscription on Tuesday the 27th of November. The issue size is Rs 8,000 crs and has a green shoe option of 6,000 crs. There is a discount of 4.5% for all investors. Further there has been tweaking in the composition of the ETF, with construction and renewable energy being introduced for the first time. The current composition has 11 stocks against the earlier 10 with four additions and three exclusions. One must also consider the fact that public sector companies are high dividend paying companies and the dividend yield of public sector companies is between 3-4 times that of the NIFTY average. With low valuations and reduced interest in PSU shares currently, this offer looks attractive.

With crude prices having fallen below 60 dollars to the barrel and now trading at a year’s low and consequentially the rupee appreciating quite sharply, things couldn’t be better. There is one cause of concern at to how some stocks have crashed in the US. Apple the I-Phone maker and currently one of the most prized companies in the Dow Jones has had a price range of 150.24 dollar to 233.47 dollars. The high was made as recently as about a month ago and the share is currently trading at 172.29. The share has lost over 61 dollars in under a month and this is close to 30%. This share is a company which sells products, telephones, computers and watches. A company like this with so much of respect not in the USA but globally, means some serious issues are there which probably most people are not aware. The point I am making is that the trade war is hurting al countries. It’s not just China and therefore markets are worried.

Economic data is due in the week ahead and of interest would be the GDP numbers for the second quarter. While they are expected to provide positive upside, the current focus is the elections and their results thereafter. Markets will continue to be volatile and take cues from overseas markets particularly Dow Jones in the week ahead. The strategy of buying on dips is being reviewed as any sharp dip from here could make the market vulnerable and weak. We would then have to allow the market to find its base and consolidate at lower levels. The new strategy would be selling on rallies and wait for buying opportunities. Secondly with expiry due, there could be roll-over pressure on Thursday.

Trade cautiously.

Markets continued to gain strength and rose for the third consecutive week. BSESENSEX was up 298.61 points or 0.85% to close at 35,457.16 points. NIFTY was up 97 points or 0.92% up at 10,682.20 points. Broder markets saw BSE100, BSE200 and BSE500 gain 0.69%, 0.61% and 0.45% respectively. Markets gained on three of the five trading days, were down on one day and remained flat on the fifth day.

Dow Jones was under pressure and lost 576.08 points or 2.22% to close at 25,413.22 points. The Indian Rupee continued to gain strength and was up 57 paisa or 0.79% to close at 71.92. Expiry is still 9 trading sessions away and the bulls have an upper hand with the series up 557.30 points or 5.50% higher.

RBI has its board meeting on Monday and the fireworks which were being expected seem to have fizzled out, at least for the time being. The thorny issues between RBI and the government seem to have been sorted out in the meetings between RBI Governor and the PM and the FM. All is well that ends well should be what is the outcome of the Monday meeting. One hopes that both sides use caution as one doesn’t want the regulator fighting when the economy is passing through tough times. Keeping fingers crossed however.

14th November which was to see a large roll over of commercial paper passed off peacefully and there were no untoward incidents. The only fall out is that investors in mutual fund instruments have become choosy in selecting funds and are avoiding those with investments in some of these so called risky NBFC’s.

Crude prices continued to be under pressure and to expect some bounce back would be in place. Further OPEC is to meet to introduce further cuts in production. Whenever such things happen and are intended to hurt global economies, some one does not follow the diktat. Let’s hope something of this sort happens this time around as well.

Tata Sons is in preliminary talks with Jet Airways. While this is just the first-round meeting markets have jumped into the same thinking the final contours of the deal would be announced shortly. Tatas have always been cherishing the idea of having a dominating role to play in aviation and already have two joint ventures in Vistara and Air Asia. When Jet does happen, they would catapult into a dominant player though not the largest. Keep watching this space for further updates.

Pressure on the economy has eased with crude prices softening and the rupee recovering. This would make things a little easier for the deficit to be kept under control.

The week ahead would see consolidation and make attempts to reach higher levels. The overall range would however be narrow and there would be an upward bias. Use rallied to sell and dips to buy as mentioned in the previous week as well.