Heads and retails

The markets behaved as expected and anticipated and ended at new levels for the SENSEX. The NIFTY is still a few points away. The BSE SENSEX gained 513.29 points or 2.48 per cent at 21,196.81 points. The NIFTY gained 162.30 points or 2.64 per cent to close at 6,307.20 points. The broader indices like the BSE100, BSE200 and BSE500 gained similar at 2.71 per cent, 2.76 per cent and 2.75 per cent respectively.

BAPS Swaminarayan held the traditional chopda pujan at Swaminarayan temple in Dadar yesterday. Pic/Sameer Markande

The BSE MIDCAP gained handsomely and was up 3.55 per cent while the BSE SMALLCAP gained 1.95per cent. Like the FM says that he can see green shoots everywhere, one gets the feeling that the stage is being set for retail investors to enter the market as midcap and smallcap stocks have begun to play catch up, though it is still a long way to go.

The top gainer amongst sectoral indices was BSE BANKEX up 6.68 per cent, helped by the RBI review meet. The other gainers included BSECON DURABLES up 5.30 per cent and BSE PSU up 4.42 per cent. The losers were led by BSE FMCG down 1.58 per cent. The only other loser was BSE IT down 0.07 per cent.

Stocks
In individual stocks, the biggest gainer was PNB up 14.88 per cent. Others included Canara Bank up 14.24 per cent, Bank of Baroda up 12.79 per cent, ICICI up 10.86per cent and Maruti Suzuki up 8.56per cent. The losers were few and one had to search for them with ITC being the biggest loser, down 3.32per cent. Others included Infosys down 1.56per cent, and Tech Mahindra down 1.10per cent.

Tuesday saw RBI Governor Raghuram Rajan do exactly as written where he raised repo rates by 25 basis points and reduced by an identical amount the Marginal Standing Facility (MSF). The differential between the repo rate and the MSF is now 100 basis points, which is the lower band set by the new governor.

The markets have rallied post the RBI announcement and hit new highs. The FED has similarly kept rates unchanged in the US in their meeting and it appears that tapering may now not happen before March 2014. This was welcome news for the markets, which saw the Dow Jones gain 45 points or 0.28per cent to close at 15,615 points.

FIIs continued their buying and bought shares worth Rs 4,865 crore for the week and Rs 18,000 crore for the month. Domestic institutions were sellers and sold shares worth Rs 1,500 crore in the week and Rs 3,626 crore in the month. The Rupee lost 28 paise or 0.46per cent to close at Rs 61.74.

The markets have hit a new high but there is no optimism or excitement on the street. Retail investors as of date are unmoved and not interested in the markets. Brokerages are shutting down due to lack of business and non-viability including HSBC, which is closing the retail broking business acquired a few years back.

Mutual funds redemption is huge and one is not sure as to what is differentiating the optimism in the numbers, which the benchmark indices portray, and the feelings of retail investors. The difference is in the performance of the midcap and small cap stocks and here there seems to be some improvement in the last couple of weeks, giving that one ray of hope for the markets.

Sunday's muhurat trading for ‘Samvat 2070' is expected to show a new high for the markets. (see box: Mahurat Short). Monday is a trading holiday and Tuesday may see some consolidation in the marketplace. Towards the latter part of the week one should expect some more gains particularly in the midcap and smallcap space. The biggest driver is the continued FII inflow and the expected election results in states on December 8.

Key levels for the SENSEX are 20,975 and 21,525 while they are 6,220 and 6,425 for the NIFTY. The support for the SENSEX is at 21,127 points, then at 20,974 points, then at 20,765 points, then at 20,510 points and finally at 20,375 points.

It has resistance at 21,280 points, then at 21,432 points, then at 21,495 points, then at 21,635 points and finally at 21,825 points. The NIFTY has support at 6,285 points, then at 6,239 points, then at 6,146 points, then at 6,075 points and finally at 6,035 points. It has resistance at 6,330 points, then at 6,376 points, then at 6,404 points, then at 6,454 points and finally at 6,498 points. Enjoy the rally but buy only fundamentally strong companies.

Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd. Readers are invited to read more about these and other issues on his website https://ak57.in

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 and under no circumstances should be used for actual trading or making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment or trading decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at his or her risk.

Muhurat Short
Trading for ‘Samvat 2070' began on an optimistic note but ended on a fairly sedate one. The redeeming feature of the same was that the benchmark indices held their ground and closed in positive territory. The mid cap and small cap indices were the real gainers up 1 per cent or more. Very clearly, if the market momentum has to carry on, the participation of retail and therefore positive movement in the smaller indices is mandatory. Diwali muhurat trading is symbolic but it augurs well as we did not have any major fireworks. The 75-minute special session ended on an optimistic note.u00a0