Desi whirl

Finance Minister Arun Jaitley (r), incoming Revenue Secretary Ajay Bhushan Pandey (l) and outgoing Finance & Revenue Secretary, Hasmukh Adhia (c) during the farewell ceremony of the latter in New Delhi. Pic/PTI

Trading for the week began on a solid note and markets gained on the first four trading days. They remained flat on the last day. BSESENSEX posted gains of 1,213.28 points or 3.47 per cent to close at 36,194.30 points. NIFTY gained 350 points or 3.32 per cent to close at 10,876.75 points. The broader indices saw the BSE100, BSE200 and BSE500 gain 2.89 per cent, 2.71 per cent and 2.48 per cent respectively. BSEMIDCAP was up 1.07 per cent and BSESMALLCAP up a mere 0.53 per cent.

Rupee spree
The top sectoral gainer was BSEIT up 6.35 per cent followed by BSETECK 3.84 per cent and BSEFMCG 2.73 per cent. The top sectoral loser was BSEMETAL down 1.66 per cent followed by BSEOIL&GAS 1.31 per cent and BSEPOWER 0.07 per cent. In individual stocks, the top gainer was TCS up 8.56 per cent followed by Infosys 7.50 per cent and Mahindra and Mahindra 5.90 per cent. The top loser was Yes Bank down 13.24 per cent followed by ONGC 7.88 per cent and Sun Pharma 6.77 per cent. Indian Rupee continued to gain ground and was up R 1.08 or 1.53 per cent at 69.59. Dow Jones also posted a four-digit weekly gains and was up 1,252.51 points or 5.16 per cent at 25,538.46 points. Brent crude continued to trade below 60 dollars to a barrel.

Good going
It was a great week for India and the markets as crude fell, rupee recovered, and markets were on a roll. GDP for the second quarter July-September 2018-19 came at 7.1 per cent, higher than the previous period year ago by 0.8 per cent. Many economists think that this was lower than expected, but the fact remains that there has been growth quarter on quarter. November futures expired on a positive note and bulls have not had it so good in a very long time. There were quite a few trading holidays in November and yet the series gained 733.80 points or 7.25 per cent to end at 10.858.70 points.

Stock talk
The response to the follow-on offer of CPSE ETF has been spectacular. Looking at the response the Govt has decided to retain the full green shoe option and raise R 17,000 crore from the offer. This amount is higher than the total divestment during the current financial year so far. The anchor portion received bids for R 13,300 crore. Prices of the heavyweight stocks in the basket of 11 which comprise the ETF saw big losses during the week, particularly the last three days. ONGC was down 7.88 per cent, Coal India down 4.85 per cent and NTPC 4.21 per cent respectively. It would not be unexpected if these three stocks rally strongly when trading resumes in the coming week. Retail participation saw about 1.75 lakh applications, something which has not happened before in an ETF. The product is being understood. The discount of 4.5 per cent for all participants helped too.

Trade wars
The G-20 summit saw cooling off the strained relations between the United States and China. It has been agreed that there would be no change of duties over the next 90 days, and during this period China would strive to reduce the trade surplus it has with the United States. It would buy goods worth 200 billion dollars and duties would remain at the present rates. This is expected to help reduce the tension between the two countries and therefore have global ramification. PM Narendra Modi stressed about economic offenders who have taken shelter in some countries and the need to seek that they be brought to justice.

Election eye
A positive outcome from the summit augurs well for the markets. As far as India is concerned with crude falling, rupee appreciating and markets recovering, one could not have asked for more. In the days ahead, we should see the markets build on its base, consolidate and the by weekend brace itself for the exit polls to be announced on Friday evening. Results would be announced on Tuesday, December 11. In case they are against the ruling BJP, there would be a knee jerk reaction and markets would be back on course. Trade cautiously and use any sharp rallies to take money off the table.

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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