The week gone by had a mere four trading sessions but had plenty of action. At the end of the week, in which we celebrated our 78th Independence Day, markets staged a smart recovery on Friday and changed the sentiment completely. BSESENSEX gained on two of the four trading sessions and lost on two. BSESENSEX gained 730.93 points or 0.92% to close at 80,436.84 points while NIFTY gained 173.65 points or 0.71% to close at 24,541.15 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.65%, 0.66% and 0.57% respectively. BSEMIDCAP gained 0.43% while BSESMALLCAP was up 0.45%. 

The Indian Rupee remained unchanged at Rs 83.96 to the US Dollar. Dow Jones had a great showing and was up 1,162.22 points or 2.94% at 40,659.76 points. Data from the US now gives plenty of comfort that the US FED in its meeting in September would cut interest rates. How much the same would be cut is still debatable, but the cut is imminent. One must also remember that the Presidential elections are due in November in the US and the FED would like to be cautious in whatever they do. 

The week saw plenty of action and one needs to understand the importance of Friday. In the last four weeks, Friday has played a very significant role. The first was Friday the 26th of July, the first day of the August series. On this day, BSESENSEX gained 1,293 points whilst NIFTY was up 428 points. The next was Friday the 2nd of August when BSESENSEX lost 886 points while NIFTY lost 293 points. This was after markets made a new high on the previous day at 82,129 points and 25,078 points respectively. Incidentally this was followed by what could be termed as Black Monday when markets fell very sharply. The third such day was Friday the 16th of August, post-Independence Day, when BSESENSEX gained 1,321 points while NIFTY gained 398 points. With three out of four Fridays having a big movement, it sure becomes imperative to track future Friday’s as charts are all about patterns and history. 

In primary market news, the week saw two listings during the week and one issue opening and closing for subscription. The week ahead would see one listing and two issues open and close for subscription. 

The first issue to list was Brainbees Solutions Limited or better known as ‘Firstcry’ which had issued shares at Rs 465. Listing happened on Tuesday the 13th of August. The share debuted at Rs 625 and closed on day one at Rs 678.25, a gain of Rs 213.25 or 45.86%. During the course of the week, the share slipped marginally to close at Rs 669.05, a gain of Rs 204.05 or 43.88%. 

The second share to list was Unicommerce Esolutions limited which had issued shares at Rs 108. This share too listed on Tuesday the 13th of August. The discovered price was Rs 230. The share closed day one at Rs 210.05, a gain of Rs 102.05 or 94.49%. By the end of the week, the share witnessed profit taking and closed at Rs 189.60, a gain of Rs 81.60 or 75.56%. 

The issue from Saraswati Saree Depot Limited which had a price band of Rs 152-160, received excellent response. The issue overall was subscribed 107.52 times with QIB portion subscribed 64.12 times, HNI portion subscribed 358.65 times and Retail portion subscribed 61.88 times. There were 21.80 lakh applications in all. This issue would list on Tuesday the 20th of August. 

The first issue to open would be from Interarch Building Products Limited. The issue would open on Monday the 19th of August and close on Wednesday the 21st of August. The price band is Rs 850-900. The issue consists of a fresh issue of Rs 200 crores and an offer for sale of 44,47,630 shares. The company is into the business of turnkey pre-engineered steel construction solution providers in India. It reported revenues of Rs 1,293.30 crores for the year ended March 2024. It had an EBITDA margin of 8.74% and a PAT margin of 6.67%. The company reported an EPS of Rs 58.68. The PE for the company is 14.49-15.34 which is attractive at current levels of the markets and when compared with its listed peers. 

The second issue to tap the capital markets is Orient Technologies Limited which is opening its issue on Wednesday the 21st of August and closing on Friday the 23rd of August. The issue consists of a fresh issue of Rs 120 crores and an offer for sale of 46 lakh shares, in a price band of Rs 195-206. The company is an information technology (IT) solutions provider headquartered in Mumbai. The company reported revenues of Rs 602.89 crores for the year ended March 24 with an EBITDA margin of 9.39% and a PAT margin of 6.87%. There EPS for the year was 11.80 and the PE band is 16.53-17.46. The company has entered the promising and lucrative business of cyber security which is a crucial and fast growing area and also enjoying higher margins. 

Ola Electric Mobility Limited which had issued shares at Rs 76 and listed on 9th of August is on a roll. Shares closed higher by 74.68% at Rs 132.76. They seem to have further momentum in them as at their annual event ‘Sankalp’, the company has launched four motorcycles in a range of Rs 75,000 to Rs 2,50,000. These motorcycle bookings have opened and they will be delivered from Diwali day 2025. The motorcycle market is the larger market with 70-72% market share amongst 2-wheelers in the country. However, in the EV space this share of motorcycles is a mere 1% and this gives the opportunity to the company to penetrate. Expect the share to gain momentum post this event. 

Post the correction markets have recovered very sharply and smartly over the last couple of days. We are now near the resistance zone and markets need to decide where they are headed. For the immediate short term we seem to be in a broad trading zone with levels of 23,850-23,900 on NIFTY Acting as support. In case the market has strength, we need to quickly move past 24,550 and head towards 24,900 or thereabouts. In case markets struggle at current levels, we could see them slipping again. 

In terms of FPI action they continue to be net sellers in the markets. One did see large short covering on Friday, but with their present mindset they are capable of again shorting the markets in the coming week. The trading strategy would be to avoid large exposures in either direction and play by the ear. At best it appears we will test the upper limits and then head down. Effectively trade in a broad range from hereon. 

Trade cautiously. 

Markets were topsy-turvy in the week gone by. The correction which had set in on Friday of the previous week (2nd August) continued and we saw a sharp sell-off on Monday. Probably this was a fall which post-covid market participants had never seen before. One must ignore of course the fall witnessed on the 4th of June when results were declared for the general elections which were lower than what the exit polls had said. This saw a sharp reaction from the markets in India and also globally. There has been recovery from the lower levels, but whether we are out of the woods is still an issue which is debatable. To add to the worries of the Indian markets is the fact that with results season coming to the last reporting week, the comfort one looked for in numbers showing growth in revenues and profits seems to be missing. This makes markets that much more expensive at a time when the one big factor against them is valuations. 

The BSESENSEX lost on three of the five trading sessions and gained on two. BSESENSEX was down 1,275.04 points or 1.58% to close at 79,705.91 points while NIFTY lost 350.20 points or 1.42% to close at 24,367.50 points. The broader markets saw BSE100, BSE200 and BSE500 lose 1.24%, 1.38% and 1.46% respectively. BSEMIDCAP lost 1.01% while BSESMALLCAP was down 1.86%. 

The Indian Rupee was under pressure and lost 21 paisa or 0.25% to close at 83.96. Dow Jones was choppy and lost on two of the five trading sessions. It lost 239.72 points or 0.60% to close at 39,497.54 points. 

The lows made in our markets on Monday during the sharp fall were at 78,295.86 points on BSESENSEX and at 23,893.70 points on NIFTY. These will become not only significant support levels for any downturn but also a pivot to decide any trends in the medium term on the market. On the upside previous tops are a longer resistance, but levels of 24,500 on NIFTY and at 80,500 points on BSESENSEX become important levels which have to be surpassed and maintained for any uptick to continue in the markets. Until then we can say that the broad trading zone for the markets would be in the range of 23,900-24,500 on NIFTY and at 78,300-80,500 on BSESENSEX.

Primary markets have been very active and we saw three issues listed during the week. The first of them was the listing of Akums Drugs and Pharmaceuticals Limited listed on Tuesday the 6th of August. The company had issued shares at Rs 679. The discovered price was Rs 725 on both the stock exchanges. The share hit the upper circuit at Rs 797.45 on BSE and Rs 797.50 on NSE. It closed a tad lower at Rs 796.25, a gain of Rs 117.25 or 17.26%. By Friday, the share traded higher and closed at Rs 803.70, a gain of Rs 124.70 or 18.37%.  

The second share to list was that of Ceigall (India) Limited which had issued shares at Rs 401. The share made its debut on Tuesday the 8th of August with the discovered price being Rs 413 and closing day at Rs 386.05, a loss of Rs 14.95 or 3.72%. On Friday, the share gained some ground and closed at Rs 396.95, a reduced loss of Rs 4.05 or 1.01%. 

The third share to list was that of Ola Electric Mobility Limited who had issued shares at Rs 76. Shares debuted on Friday the 9th of August and the discovered price was Rs 76. Shares then closed at the upper circuit of Rs 91.18 on BSE, a gain of Rs 15.18 or 19.97%. On NSE, the closing price was factionally higher at Rs 91.20. 

Besides this we had two issues which opened and closed for subscription. The issue from Unicommerce Esolutions Limited opened on Tuesday the 6th of August and closed on Thursday the 8th of August. The issue at close was subscribed 168.39 times overall. The QIB portion was subscribed 138.75 times, HNI portion 252.48 times and Retail portion was subscribed 131.15 times. 

The issue from Brainbees Solutions Limited had opened on Tuesday the 6th of August and closed on Thursday the 8th of August. The company is an online and off-line retailer of accessories, clothes and everything that mothers need, new born babies and kids wear up to 12 years of age. They have a popular website firstcry.com. The price band of the issue is between Rs 440-465. The company is currently loss making and is yet to make profits. It’s a one-of-a-kind company and has a head start in business. The issue was subscribed 12.22 times overall with QIB portion subscribed 19.3 times, HNI portion subscribed 4.68 times and Retail portion subscribed 2.31 times. 

Both the issues which closed for subscription last week, would list on Tuesday the 13th of August. 

The week ahead also sees the issue from Saraswati Saree Depot Limited which would open on Monday the 12th of August and close on Wednesday the 14th of August. The price band is Rs 152-160. The company is into the wholesale business of selling sarees and its predominant markets are Maharashtra. The company reported sales of Rs 610 crores for the year ended March 24 and an EPS of Rs 8.92. The PE band for the issue is 17.04-17.94 which is competitive with that of Sai Silk which is a retail brand based in South India. The wholesale and retail businesses are quite different in nature. The issue looks decently priced. 

The week ahead has a trading holiday on Thursday the 15th of August when we celebrate our Independence day. This would cause a mild disruption and see markets seeing a break in momentum. On the positive side, indications from the FED suggest that there would be an interest rate cut in the US in the September meeting. Closer home, RBI in its bi-monthly meeting kept interest rates unchanged on expected lines. RBI believes that it is getting closer to its target of inflation rates and is monitoring the progress of inflation. 

In a continuation of the Hindenburg saga, there is a spate of allegations now being made by Hindenburg against the present chair-person of SEBI. There has been a denial put out from her explaining matters. This has now become a serious matter as the tone of accusations is against the regulator and implies, what can a regulator who has an issue herself, do against Hindenburg. Expect fast developments on this issue over the next 48 hours. I believe there may not be much action in the marketplace on this news in general. This now becomes a matter for the government and the regulator to act upon, as their authority has been effectively challenged. 

Markets in the coming shortened four-day week will have a tough time to keep things under control. We were hit last week by a sell-off and the mood of FPIs is still not clear. They appear to be sellers on many more days than they are buyers. The biggest pocket of support is from Domestic institutions who seem to have compelling reasons to invest the sea of money that they are being flooded with. In such a scenario with no immediate news flow to significantly alter market direction, we should remain in a broad trading zone as mentioned above. The strategy would be to flow with the trend and use any meaningful rally to sell and book profits. 

Trase cautiously.