Ever Onward

The bulls had the better of the bears through March, with no signs of change through this month

The market juggernaut continued and inched closer to new life time highs on the BSESENSEX and NIFTY. Gaining on three of the five trading days and losing on the remaining two, BSESENSEX gained 508.30 points or 1.33 per cent to close at 38,672.91 points. NIFTY was up 167 points or 1.46 per cent to close at 11,623.90 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.53 per cent, 1.645 and 1.68 per cent respectively. BSEMIDCAP was up 2.67 per cent and BSESMALLCAP gained 1.82 per cent.

No losers

The top sectoral gainer was BSECONSUMER DURABLE up 3.09 per cent followed by BSE OIL&GAS up 3.08 per cent and BSEBANKEX 2.99 per cent. There were no sectoral losers but the one to rise the least was BSEAUTO up 0.14 per cent. In individual stocks the top gainer was India Bulls Housing up 17.76 per cent followed by Yes Bank 8.93 per cent, SBI 7.61 per cent and Bank of Baroda 7.20 per cent. The top loser was Eicher Motors down 4.23 per cent followed by Wipro 2.19 per cent and Hero Moto 1.92 per cent.

A review

The Indian Rupee lost 20 paisa or 0.29 per cent to close at R 69.15 to the US Dollar. Dow Jones had a strong performance and gained 426.36 points or 1.67 per cent to close at 25,928.68 points. The week ahead sees RBI meeting for its first monetary policy review of financial year 2018-2019 on April 3 and 4. It is believed that there would definitely be a rate cut of 25 paisa. While the 25 basis points cut is a given, there are a few people who believe that the cut could be more at 50 basis points. While 25 is par for the course, a 50 basis points cut could act as the catalyst for markets to touch new highs if not already done.

Shares of MSTC Limited listed on Friday, March 29 and they had a poor showing. The company had tapped the capital markets with its offer for sale which was not subscribed at the first attempt and the issue was extended. In the extension, the issue did get oversubscribed. Shares which were issued at R 120 closed for the week at R 114.20, a loss of R 5.80 or 4.83 per cent.

Issue eye

The week ahead sees the offer for sale of Rail Vikas Nigam Limited (RVNL), which is offering 25,34,57,280 equity shares in a price band of R 17-19 with a discount of R 0.50 for retail and eligible employees. The issue has opened on Friday, March 29 and closes on Wednesday, April 3. The company which is a PSU is incorporated by the Ministry of Railways. The company has an order book of over R 77,000 crore of which roughly R 37,000 crore are long gestation projects. The company would be able to execute the balance of roughly
R 40,000 crore between 36 and 42 months. The second issue is from Metropolis Healthcare Ltd, which is tapping the capital markets with its offer for sale of 1,30,85,095 shares in a price band of R 877-880. The promoter's shares are currently pledged.

Rally rise

Markets are likely to make new life time highs. What next is a more important question and the simple answer to that is heightened volatility. Markets would enter uncharted territory and there would be a fight between the bulls and bears. With bulls having the better of the markets in March things should continue in their favour until adverse news hit the markets. Enjoy the rally and use sharp rises to book profits. Another key point would be the role of FIIs who have invested over R32,000 crore in March in equity alone. If they remain bullish, it is unlikely our markets become bearish.

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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