Glances at chances

Market poised to offer trading opportunities

Trading for the week was a mixed bag with markets being just about flat on the last trading day of calendar year 2018. On the first they were down when midway, they turned around and gained quite sharply. The next two days saw markets falling before they recovered some lost ground on Friday but ended with losses for the week. BSESENSEX lost 381.62 points or 1.06 per cent to end at 35,695.10 points. NIFTY lost 132.55 points or 1.22 per cent to close at 10,727.35 points. The broader indices saw BSE100, BSE200 and BSE500 lose 1.23 per cent, 1.20 per cent and 1.11 per cent respectively. BSEMIDCAP lost 1.38 per cent while BSESMALLCAP was down just 0.09 per cent.

In numbers
The top sectoral gainer was BSEREALTY up 1.23 per cent followed by BSEBANKEX 0.36 per cent and BSECONDUR 0.08 per cent. The top loser was BSEAUTO down 4.48 per cent followed by BSEMETAL 3.70 per cent and BSECAPGOOD 2.16 per cent. In individual stocks, the top gainer was Infratel up 7.22 per cent followed by Yes Bank 4.38 per cent and Bank of Baroda 2.66 per cent.

The top loser was Eicher Motor down 12.90 per cent followed by Mahindra and Mahindra 9.59 per cent and Hindalco 5.55 per cent. The calendar year 2018 saw BSESENSEX gain 2,011.50 points or 5.91 per cent to close at 36,068.33 points. NIFTY gained 331.85 points or 3.15 per cent to close at 10,862.55 points. BSEMIDCAP was down 13.38 per cent while BSESMALLCAP was down 23.53 per cent. Dow Jones lost 1,580.40 points or 6.39 per cent to close at 23,138.82 points. The calendar year 2018 was a tough one for equity markets. It is commendable that because the benchmark indices, BSESENSEX and NIFTY ended with gains.

Supreme Court is to reopen the class action suit against Nestle India in its case of Maggi Noodles. The company has been accused of having excessive lead in its products. The case had surfaced in January 2015. The peak of the share price in January 2015 was R 7,425 which fell to R 4,990 by February 2016. The share peak in December 2018 was R 11,700 which has fallen to R 10,878 as of Friday, January 4. How long this case would last or come to a logical end is anybody's guess, but there would be price damage for sure. Depending on the outcome, this share is likely to be in focus till the case gets over.

Result season for the October to December quarter 2018 kicks off with two large IT companies declaring their results this week. TCS declares on Thursday, January 10 while Infosys declares on Friday, January 11. The IT sector is likely to see muted results this quarter and their share prices were under pressure. Similarly another sector under pressure has been auto as the growth in sales seems to be facing headwind.

Stability seen
The quarter for which results are to be declared saw the NBFC sector experience a liquidity crisis. It would be interesting to see how this sector fares when results are declared. There is expectation in general that results for the quarter will show some positive signs which could help prices stabilise going forward. With Dow having recovered quite sharply on Friday, one could expect US markets to be in a better frame of mind. It makes sense to ride the rally which could take place. Use any dips to buy and sharp rallies to book profits. The market is currently poised to offer trading opportunities going forward.

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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