Arun Kejriwal: The only certainty is a lot of uncertainty

Farmer Terry Davidson displays one of his soybeans in Harvard, Illinois, the same day China imposed retaliatory tariffs aimed at the US soybean market. Pic/AFP

Markets continued to be choppy and gained on three of the five trading sessions. BSESENSEX gained 234.38 points or 0.66 per cent to close at 35,657.86 points. NIFTY gained 58.35 points or 0.54 per cent to close at 10,772.65 points. The broader indices saw the BSE100, BSE200 and BSE500 gain 047 per cent, 0.46 per cent and 0.41 per cent respectively. BSEMIDCAP was negative 0.39 per cent while BSESMALLCAP gained 0.17 per cent.

Who gained?
The top sectoral gainer was BSEAUTO up 3.50 per cent followed by BSEFMCG 1.32 per cent and BSEHEALTHCARE 0.30 per cent. The top loser was BSEMETAL down 3.52 per cent followed by BSECONDUR 3.19 per cent and BSEPOWER 2.47 per cent. In individual stocks the top gainer was Bajaj Auto up 7.02 per cent followed by Maruti 5.20 per cent and Hero Moto 4.54 per cent. The top loser was Vedanta down 7.40 per cent, followed by NTPC 6.12 per cent and Bharti Tele 5.29 per cent.

The Indian Rupee was under pressure and lost 40 paisa or 0.58 per cent to close at Rs 68.87. Dow Jones gained 185.07 points or 0.76 per cent to close at 24,456.48 points.

The trio
There were three issues which listed last week. First was PSU RITES Limited which had an offer for sale and allotted shares at R 185. The share on debut day on Monday, July 2 closed with gains of 14.97 per cent at R 212.70. It lost ground during the week and closed at R 197.15, a weekly gain of R 12.15 or 6.57 per cent. The second issue which was also an offer for sale and listed on Monday, July 2, was from Fine Organics Limited. The company had issued shares at R 783 which closed with gains of R 5.08 per cent at R 822.80. Like RITES, this also lost ground during the week and closed with weekly gains of 2.92 per cent at R 805.90. The third and final listing was from auto component maker Varroc Engineering Limited. This was an offer for sale and the allotted price was R 967. Shares listed on Friday, July 6 and closed with gains of Rs 73.35 or 7.59 per cent at Rs 1,040.35.

On track
The SEBI classification of various categories of stocks according to market cap has been updated. The last or 100th stock in large cap has a market cap of Rs 30,608. The 250th stock which would classify as mid-cap has a market cap of Rs 9,964 crore. Similarly, the 500th market cap company is at Rs 2,927 and the 1000th at R 639 crore. The full list is available on the Association of Mutual Funds in India website. The same can be accessed as amfiindia.com. This list would help in tracking how stocks fare and the change in their market cap.

Trade wars
Markets are stuck in a narrow range and are trying very hard to break out from them. In the previous week they had closed below the 10,700 level on NIFTY and had become quite vulnerable. While they have regained the 10,700 level, they are certainly not out of the woods. With duties and counter duties levied on China and by China on the USA become applicable, trade wars are on. If not full-scale war, at least battle lines have been drawn and full-scale posturing is on. Steel and aluminium prices have risen sharply in the US. India and China would have a crucial role to play as they are both immediately affected parties in the ongoing dispute. Further, they would get sharply impacted with the sanction imposed on Iranian crude oil becoming effective in a couple of months. How China and India react to the situation could have a significant bearing going forward on markets.

Action caution
Markets are fairly range bound on a weekly basis but highly volatile on a daily basis. Currently they seem to be in a broad range and moving in both direction. Last week, it showed clear signs of turning weak but managed to cut losses and gain for the week. The week ahead would continue to provide buying opportunities on dips. Trade cautiously.

Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd.
Disclaimer: No financial information whatsoever published anywhere in this newspaper should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is for educational and information purposes only.

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