Markets have a mind of their own and the five trading sessions last week were of a different kind. How markets change color almost every day, just beats me. On Monday and Tuesday, markets opened with an upside gap and closed upwards but the difference between the opening and the closing was very small. Effectively, volatility saw intraday movement drop many notches. Wednesday was a quiet day. Thursday was April futures expiry day. It began like any other day of the previous week, on a quiet day and then saw very sharp upward movement in the last hour of the day. NIFTY on Thursday gained 168 points on a net basis and 265 points from the low of the day. Friday was the complete opposite, where markets lost through the day and were down 151 points on a net basis and were down 235 points from the high of the day to the close. At the end of five different days of the week, BSESENSEX gained on four of the five trading sessions and lost on one. BSESENSEX was up 641.83 points or 0.88% to close at 73,790.16 points, while NIFTY gained 272.95 points or 1.23% to close at 22,419.95 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.53%, 1.85% and 2.10% respectively. BSEMIDCAP was up 3.96% while BSESMALLCAP was up 3.97%. 

The India Rupee gained 13 paisa or 0.0.16% to close at 83.34 to the US Dollar. Dow Jones gained on three of the five sessions and lost on two. At the end of the week, Dow was up 253.26 points or 0.67% to close at 39,239.66 points. 

The 18,000 crores follow-on -offer from Vodafone Idea Limited was well received by investors and was oversubscribed. The QIB portion was subscribed 19.31 times, HNI portion was subscribed 4.54 times and Retail portion was subscribed 1.01 times. Overall, the issue was subscribed 6.56 times. Shares issued through the FPO listed on Thursday, the 25th of April. The previous day’s close (Wednesday) was Rupees 13.09. The discovered price was Rupees 12 and the closing price was Rupees 13.89 on listing day. The share gained Rupees 2.89 from issue price or 26.27%. The share gained a tad on Friday and closed at Rupees 14.01, up 3.01 or 27.36%. 

There is a roadshow of Indegene Limited which will tap the capital markets with its fresh issue for Rs 760 crores and an offer for sale of 3,62,91,497 shares as per DRHP.  The price band, date of issue opening and closing and the size of the OFS would be announced through a newspaper advertisement. The roadshow would be held in Mumbai on Monday, the 29th of April. 

Results season is on and we have not had spectacular results from the few that have declared results so far. One is waiting for it to happen so that leads can be taken and investors look at opportunities which exist in the marketplace. 

Two of the seven rounds of voting for the general elections have been completed. The third round would be held on 7th of May. Results would be declared on 4th of June. 

April futures expired on Thursday, the 24th of April on a very buoyant and positive note. The NIFTY April series gained 243.45 points or 1.09% to close at 21,570.35 points. To put things in perspective, the gains on Thursday, which was expiry day, were at 167 points. The first day of the new series of May, saw NIFTY lose 151 points on the very first day. Call it by any name, the bulls won the war and the series on Thursday and lost it on Friday.

Coming to the markets in the week ahead, we have a trading holiday on Wednesday the 1st of May. There would be a holiday in most of the global markets as well. However, the week would be divided into two equal halves of two days duration each, making markets that much more volatile. Levels of 75,124 points, which was the previous tops and 22,775 would be very strong resistances. On the support side, lows made last week at 71,816 points and 21,777 points would act as strong supports. If these are violated, then one could see markets slipping to 71,100 and to 21,550 points respectively.  

The trading strategy for the week ahead would be to trade on the long side with extreme caution on account of the mid-week holiday. Buy on strong dip and sell on any strong rallies would be the order of the day. Markets are yet trying to establish a comfortable trading zone for themselves. 

Trade cautiously. 

Markets in the week gone by were driven by fear, war mongering and panic. Of course, all of this leads to extreme volatility and sharp two-sided moves. At the end of the four-day week which had a mid-week holiday on Wednesday, markets lost on three sessions and gained on just one. BSESENSEX lost 1,156.57 points or 1.57% to close at 73,088.33 points while NIFTY lost 372.40 points or 1.65% to close at 22,147.00 points. The broader markets saw BSE100, BSE200 and BSE500 lose 1.74%, 1.82% and 1.75% respectively. BSEMIDCAP was down 2.21% while BSESMALLCAP lost 0.96%. 

The Indian Rupee lost 6 paisa or 0.07% to close at Rs 83.47 to the US Dollar. Dow Jones lost on two of the five trading sessions and gained on three. At the end of the week, Dow ended as flat as a doormat and was up 3.16 points or 0.01% to close at 37,986.40 points. 

Information on the Israel Iran conflict took its toll on markets. On Monday, markets opened week and remained weak throughout the day. Tuesday, saw yet another gap down opening and markets closing slightly higher than the opening, but negative. Wednesday was a holiday. Thursday, was a swing day where we opened higher than the previous day’s close and then closed sharply lower. Friday was what could be described as a massive swing day where markets opened with a sharp downside gap and then gained throughout the day to close with substantial gains. 

Thursday, the 18th of April saw BSESENSEX open at 73,183 points against the previous day’s close of 72,943 points. It then made an intraday high of 73,473 points and a low of 72,365 points before closing at 72,488  points. Similar levels on NIFTY were, open at 22,212 points against previous day’s close of 22,148 points. It then made an intraday high of 22,326 points and an intraday low of 21,961 points before closing at21,995 points. Friday the 19th of April was the opposite of Thursday. Markets opened lower, went down marginally and then recovered sharply. The numbers are: BSESENSEX opened at 71,999 points, low 71,816 points , high 73,210 points and close 73,088 points. NIFTY opened on Friday at 21,861 points, made a low at 21,777 points, high at 22,179 points and closed at 22,147 points. 

The above would give good indications about the increase in volatility and sharp intraday movement being witnessed. 

IT companies have declared results and the little optimism generated by the declaration of TCS results last Friday has turned into disappointment post results from Wipro and Infosys. There is pain in the segment and currently there is a struggle going on to maintain margins. I believe there is still a couple of quarters of pain left. 

In primary market news, the follow-on offer from Vodafone Idea Limited is currently on and would close on Monday the 22nd of April. At the end of two of the three days that the FPO is open, the issue is subscribed 54% at the top end of the price band of Rs 10-11, with the QIB and HNI portion subscribed. Expect subscription levels to pick up on the last day as we get closer to closing time. The anchor portion of the issue saw keen interest and there were marquee names in the list. In what would be an interesting listing for the shares being offered through the FPO is the fact that they would list on Thursday the 25th of April, which also happens to be the expiry day for April futures. The opening price of Vodafone when the series began was Rs 13.67. The share has also been in the ban status for futures and options over the last few days on account of the exposure limits being crossed. 

The issue from JNK India Limited would open on Tuesday April 23 and close on Thursday April 25. The issue consists of a fresh issue of Rs 300 crores and an offer for sale of 84,21,052 shares. The price band is Rs 395-415. 

The company is into the manufacturing and assembling of process fired heaters, reformers and cracking furnaces. (Together known as heating equipment). The company has capabilities in thermal designing, engineering, manufacturing, supplying, installing and commissioning. This equipment is required in refineries, petrochemicals and fertiliser plants. 

The company reported revenues of Rs 407.30 crores for the year ended March 23 and a profit after tax of Rs 46.36 crores. The EPS for the year was Rs 9.51. For the nine months ended December 23, the revenues were Rs 253.39 crores and the profit after tax was Rs 46.21 crores. The EPS was Rs 9.49. Based on the EPS for the full year ended March 23, the PE multiple for the issue is 41.54-43.64. The comparable peers on a limited basis for the company are Thermax and BHEL, but limited to the supply of heat exchangers and not the balance business that these companies do. The company is into an interesting business and offers an investment opportunity for the medium to long term. 

The week ahead sees April futures expire on Thursday. The current value of NIFTY is 22,147.00 points which is lower by 179.90 points or 0.81% compared to the opening level of 22,326.90 points at the beginning of the series. The bulls have in the last week squandered away their hold on the series and over the next four days it would be difficult for them to regain lost ground. The geo-political situation makes things worse for the bulls and it appears with reasonable certainty that bears would take this series. 

Coming to the markets in the week ahead, expect sharp volatility and two-sided market movement to be the order of the day. Recent lower tops made last week at 73,905 points on BSESENSEX and at 22,427 points on NIFTY would act as strong resistances in the immediate short term. If these do get violated, previous tops at 75,124 points and 22,775 would be very strong resistances. On the support side, lows made last week at 71,816 points and 21,777 points would act as strong supports. If these are violated, then one could see markets slipping to 71,100 and to 21,550 points respectively.

The strategy for the week would be to keep positions light overnight as the situation in the Gulf or the Middle-East is very fluid. There can always be breaking news on a daily basis. Action would continue in the large cap and select midcap space only. Buy on sharp dips and sell on rallies and one saw plenty of such opportunities last week itself. 

Trade cautiously.