Yippee for the rupee

Finance Minister Arun Jaitley makes a point in the Rajya Sabha in New Delhi. Pic/PTI

Markets continued to gain ground and inch towards a new life-time high on the BSESENSEX, while NIFTY is trading at an all-time high. Markets saw a sharp correction on Friday induced by the missile attack that the US launched on Syria. It was a short week with a holiday on Tuesday. The BSESENSEX clocked gains of 86.11 points or 0.29 per cent to close at 29,706.61 points while NIFTY gained 24.55 points or 0.27 per cent to close at 9,198.30 points. The broader indices like the BSE100, BSE200 and BSE50 gained 0.43 per cent, 0.48 per cent and 0.64 per cent respectively. BSEMIDCAP was up 0.97 per cent while BSESMALLCAP was up 1.72 per cent.

Coming out tops
The top sectoral gainer was BSEREALTY up 5.28 per cent followed by BSECAPGOOD 4.92 per cent and BSEOIL&GAS 2.92 per cent. The top loser was BSEIT down 2.10 per cent followed by BSETECK 1.54 per cent and BSEFMCG 0.92 per cent. In individual stocks, the top gainer was BHEL up 7.20 per cent followed by Larsen & Toubro 6.90 per cent and Reliance Industries 6.60 per cent. In other stocks, Steel Authority was up 8.50 per cent.

The top loser was Infosys down 3.87 per cent followed by Sun Pharma 3.20 per cent, Coal India 3.02 per cent and ITC 2.75 per cent. The rupee continued its good showing and gained 57 paisa or 0.885 to close at Rs 64.28. The Dow Jones was flat as a doormat losing 7.06 points or 0.03 per cent to close at 20,656.16 points.

Mop it up
Reserve Bank of India (RBI) had its first monetary policy review for the financial year 2017-18 and decided to keep key interest rates unchanged. It however, decided to raise the reverse repo rates from 5.25 per cent to 6.00 per cent to mop up the excess liquidity which is their in the system, post the demonetisation of high currency notes.

Shares of Shankara Building Products Limited listed on Wednesday and had a great debut. The shares which were issued at Rs 460 closed trading on debut day at Rs 632.80, a gain of Rs 172.8 or 37.57 per cent. In the remaining two days of the week they rose further to close at Rs 685.10, a gain of Rs 225.10 or 48.93 per cent.

Traders work on the floor at the closing bell of the Dow Jones at the New York Stock Exchange. Pic/AFP

Ring in the new
The new financial year 2017-18 has begun. Parliament has finished its agenda of passing the budget and GST and some other bills. They would now proceed for a holiday before the monsoon session begins again. Between this holiday and the next session, our markets would have witnessed the results for the quarter January-March 2017 having been declared. Also, the monsoon would have set in and the progress of the same would be keenly watched in view of the likelihood of their being a below average monsoon being forecast. Valuations currently are rich and companies need to perform for these valuations to be justified. While liquidity is the current driver of optimism and markets, logic has to step in at some point of time.

Eye on Infosys
All is not well at Infosys and the constant bickering by the former promoters, is not in anybody's interest. A disgruntled group has been approaching the media for its problem. This should not be the case and, as shareholders, they should use proper means of communication to write to the Board and seek clarifications. In case they are not satisfied even after that, there are provisions under the law that can be used. Simply bickering and using the media as a place to wash dirty linen is causing tremendous damage to the company, its stakeholders and also the morale of its employees. This group needs to let go, or, sell its shares and go.

Buoy oh buoy
Incidentally, Infosys would be declaring its results for the quarter on Thursday, April 13. Friday is a holiday for the markets and with a long weekend people would like to reduce their positions before the same.

The markets are in an extremely buoyant mood driven by liquidity and expectations of a bright future. While neither of them can be denied as being valid reasons, one also needs to look at the fact that a left out feeling is also emerging at having missed the rally which began in the last week of December. This feeling ends with markets topping out in the short term. While the same is unlikely to happen right away, it's time to be cautious. The least one can do is look for safety by booking profits in midcap and smallcap stocks and moving money to large cap where the degree of safety is substantially more.

Trade cautiously in a market driven by liquidity. With results season beginning there could be surprises on the positive and negative side with results. Book profits to re-enter at better values.

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.