When in doubt, sit out

The markets continued their heightened volatility and once again, we had a super Friday. However, unlike last week, this time the Friday rally was not enough to keep markets afloat.

Finance Minister Arun Jaitley (l) holds a pre-budget consultation meeting with State Finance Minister Jayant Sinha (c) and secretary of the Department of Economic Affairs at the Ministry of Finance, Shaktikanta Das (r) in New Delhi on February 6. Pic/AFP/ PIB

The BSESENSEX lost 253.72 points or 1.02 per cent to close at 24,616.97 points, while the NIFTY lost 74.45 points or 0.98 per cent to close at 7,489.10 points. The broader indices saw BSE100, BSE200 and BSE500 lose 0.93 per cent, 0.92 per cent and 1.10 per cent, respectively. The BSEMIDCAP lost 0.79 per cent, but the BSESMALLCAP suffered after having lost 2.76 per cent.

Among sectors, the top gainer was BSEFMCG, up 1.42 per cent, followed by BSECONDUR 0.49 per cent and BSETECK 0.42 per cent. The losers were led by BSEPOWER down 5.70 per cent, BSEOIL&GAS 3.89 per cent, BSEREALTY 3.40 per cent and BSEPSU 3.05 per cent.

Stock rock
In individual stocks, the top gainer was Bharti Airtel at 6.01 per cent followed by Lupin 5.32 per cent, Larsen Toubro 3.45 per cent and Hind Unilever 3.43 per cent. The parent or the holding company of split IDFC gained 7.90 per cent. On the losing side were NTPC, down 12.31 per cent, ICICI Bank 9.08 per cent, HPCL 8.33 per cent, GAIL 6.97 per cent and Reliance 6.09 per cent. In other stocks, Wockhardt lost 17.83 per cent.
Meanwhile, the Dow Jones lost 261.33 points or 1.59 per cent to close at 16,204.97 points.

The Rupee gained 14 paisa or 0.21 per cent to close at Rs 67.64 to the US Dollar. FIIs were sellers during the week and domestic institutions were buyers. Inflows to mutual funds were at their lowest in the last couple of years in January 2016 at under Rs 2,200 crore. After record inflows for the whole of calendar 2015, these flows seem to have reduced significantly, as investors have begun to realise that the funds and markets have been negative during calendar year 2015.

Policy meet
The Reserve Bank of India (RBI) in its policy meet on Tuesday kept interest rates unchanged on expected lines. The Budget session of Parliament would begin on February 23 and the Budget would be presented on February 29. The first part of the session would end on March 16 and the second session would be between April 25 and May 13. The government is hopeful that meaningful discussion would happen during this session. One hopes as citizens of this country that the opposition debates rather than stalling the house and disrupting Parliament, as the nation is suffering.

Bank slide
Results season has not been encouraging and the NPA contagion has spread to private banks as well. ICICI Bank has taken a hit this time and the stock fell sharply. PSU banks would have to report their results this week and one is just not sure how bad could bad be. The only good thing about the results could be that we would probably be at the worst possible level, and, hopefully things should improve in subsequent quarters.

IPO Action
The primary market continues to see action with the IPO from Teamlease Services Limited oversubscribed handsomely. The High Networth Individuals (HNIs) portion saw subscription of 185.24 times of its bucket size and the overall issue subscribed 66 times. One needs to see the final bid figures as a new and ingenious way that has been found by this category for getting their applications rejected. They, post the closure of HNI bidding, submit an application in the retail category as well and therefore have both the applications rejected as multiple applications. The logic behind this is that they are no longer interested, as the cost of leveraged application leaves little or no opportunity for making money, or they are not confident of making money. One hopes SEBI looks into this issue and nips the same before it assumes large proportions.

There is an issue open for subscription from today, February 8, from Quick Heal Technologies Limited in a price band of Rs 311-321. The company would be raising Rs 445-451 crore through a fresh issue of Rs 250 crore and an offer for sale of 62.69 lakh shares. The company makes the antivirus software by the name of Quick Heal.

Markets would be relieved that the whole of next week is a holiday in China for the New Year, which would be the Year of the Monkey. Whether the markets remain positive or negative in the absence of China is to be seen, but very clearly, there is confusion in the minds of investors globally. Slowdown, crude prices, geopolitical issues are some of the burning problems with which investors are grappling. The negative interest rates in Japan have not helped in any manner whatsoever.

In such a situation, it makes sense to sit out for a couple of weeks and allow the situation to become more stable. The Budget would throw more light where India is headed and probably be a better time for people to enter the market.

However, if individual stocks offer the opportunity, one should take the same with both hands.