Choppy and Changing

A man walks past a mural in El Paso, Texas. The US Govt. is partially shut down as President D Trump is asking for $5.7 billion to build additional walls along the US-Mexico border while the Democrats oppose the idea. Pic/Getty Images/AFP

Markets continued to remain choppy and volatile. They fell on the opening day of the week, had a day of sharp gains and then remained flat on the remaining days, but had a big intra-day movement. BSESENSEX gained 376.77 points or 1.05 per cent to close at 36,386.61 points. NIFTY was up 112 points or 1.04 per cent to close at 10,906.95 points. The broader indices saw the BSE100. BSE200 and BSE500 gain 0.77 per cent, 0.57 per cent and 0.46 per cent respectively. BSEMIDCAP was down 1.01 per cent while BSESMALLCAP was down 0.66 per cent.

Losers, gainers
The top performing sectoral index was BSEIT up 4.43 per cent, followed by BSETECH 3.09 per cent and BSEOIL&GAS 2.97 per cent . The top loser was BSECAP GOOD down 2.91 per cent followed by BSEHEALTH CARE 1.55 per cent and BSEPOWER 1.11 per cent. In individual stocks, the top gainer was Yes Bank up 7.77 per cent followed by Reliance 7.73 per cent and Infosys 6.87 per cent. The top loser was Sun Pharma down 11.83 per cent followed by Bharti Tele 6.92 per cent and GAIL 4.70 per cent. The Indian Rupee lost 69 paisa or 0.98 per cent to close at R71.18 to the US dollar. Dow Jones gained 710.40 points or 2.96 per cent to close at 24,706.35 points. The US government shut down continues and with Donald Trump's tumultuous ways showing no signs of abating, we may have a longer than expected shutdown. There was plenty of action in the market in individual stocks based on news flow. Result season continues and the larger companies seem to be declaring better results than what were reported in the year ago quarter and the previous quarter.

The shares
After TCS and Infosys, it was the turn of Wipro to declare a good set of numbers. The share gained post results. Other big companies to declare results were Reliance Industries and Hindustan Unilever. Shares of Reliance gained quite sharply and were up R85 or 7.74 per cent at R1,183. SEBI has advised Larsen and Toubro that its buyback offer is not in compliance with section 68(2)(d) in terms of the net debt and has therefore advised the company not to proceed with the buyback offer.

This would put pressure on the share when trading begins on Monday. Shares of the company lost R52 or 3.80 per cent during the week and closed at R1,318. The share price was R1,240 in August 2018 when the company first announced the buyback. Normally, the share would be under pressure when trading begins on Monday, it should not fall below the price from where it all started at R1,240.Sun Pharma has been in the news for all the wrong reasons in the last few quarters. This time around the media is talking about a second letter from the whistle-blower. The company has written to SEBI and asked them to investigate the matter. Meanwhile the shares of Sun Pharma were on the receiving end and lost significant ground. Shares were down R52.45 or 11.83 per cent at R390.75.

Itch pitch
The itching to short the market on every rise continues and one could see that in the three days when markets ended flat. There were sharp intra-day moves where the difference between the high and low of the day was significant but flat on end of day basis. People who tried to short during the day would be caught napping and would have to cover with losses in most cases. With result season on, movement based on individual companies' performance would continue. The market as a whole would have an upward bias and the pace of the same would depend on global cues as well. The right strategy would be to continue profit taking on sharp rallies and use dips to add to ones position. No shorting for the time being.

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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