Look sharp now, after the end

A new year for trading brings us many lessons from the past, even as uncertainty hangs over the days ahead

The last week, month and year have come to an end, with the week and month ending positive, while the year ended in the red. Sensex gained 322.19 points or 1.25 per cent to close at 26,160.90 points while Nifty gained 102.15 points or 1.30 per cent to close at 7,963.20 points.

Finance Minister Arun Jaitley (c) poses for a photograph with the officer trainees of the Indian Revenue Service (Customs & C Excise) of the 67th batch during a meeting in New Delhi on Saturday. Pic/PTI

Broader markets gained more with BSE100, BSE200 and BSE500 gaining 1.37 per cent, 1.42 per cent and 1.46 per cent respectively. BSEMIDCAP gained 2.66 per cent while BSESMALLCAP gained 1.79 per cent. Top gainer in sectoral indices was BSEREALTY up 2.92 per cent followed by BSEPOWER 2.66 per cent and BSEAUTO 2.34 per cent. There were no losers but the lowest gainer was BSEIT up 0.02 per cent.

Taking stock
In individual stocks, the top gainer amongst the benchmark stocks was NTPC up 3.85 per cent. Other stocks which were in the news were related to natural gas distribution after Qatar gas cut prices to reflect the reduction and sharp fall in crude prices. Petronet LNG which imports and then reconverts it to natural gas was the biggest beneficiary as potential penalty was also waived and was up 7.62 per cent.

Others which gained were GSPL 6.38 per cent, Gujarat Gas 4.67 per cent and GAIL 2.68 per cent. ATF prices too were cut and the airline stocks simply soared with Jet Airways gaining 24.87 per cent and Indigo 23.20 per cent. On the losing side was Tata Steel down 2.35 per cent, PNB 2.12 per cent and Hind Unilever 0.72 per cent.

Dow Jones closed weak and lost 127.14 points or 0.72 per cent. For the year, Dow Jones lost 2.2 per cent. The Indian rupee gained 6 paisa or 0.09 per cent to close at Rs 66.14. FII’s were buyers of Rs 205.49 crores for December and Rs 13,055 crores for the year.

Domestic institutions were buyers of Rs 4,232 crores during the month and Rs 70,688 crores during the calendar year. The year gone by saw record inflows from investors into mutual funds, and, that partly explains why midcap and smallcap stocks were in the limelight.

Schemes of mutual funds investing in such stocks were the order of the day and hence fund managers were under pressure to invest in them even at higher valuations.

Annual review
If one were to look at the year as a whole Sensex lost 1382 points or 5.03 per cent on a close to close basis. Nifty lost 336.35 points or 4.06 per cent. The high of Sensex was 30,024.74 points and from that point, Sensex fell over 3900 points. Similarly, in the case of Nifty, the high was 9,119.20 points and the fall from there to the closing level was 1,173 points. Expiry for December series was without huge volatility and passed off peacefully. The last day saw short covering and futures expired at 7,946.55 points, a gain of 62.55 points or 0.79 per cent.

With 2015 behind us, one hopes that 2016 would be better. The terrorist attack in Pathankot is a grim reality of what the nation is up against. Even giving the benefit of doubt to Pakistan, it shows that there are enough agencies which do not want peace to be there in this region. Our hearts bleed for the families of those who laid down their lives in defending the nation.

Primary market will see the listing of shares on Narayana Hrudayalaya later during this week. Seeing the general success of issues during 2015, many companies have lined up to raise money during the coming year. The party will continue until a couple of disasters take place.

Back from holidays
The week will be range bound and people would await fresh allocations being made to emerging markets. Further with the western world returning after a fortnight of holidays, it would be interesting to see what trends emerge. China seems to be facing a really rough time and developments there could be a dampener for global markets in the New Year.

Closer home, the results for the October-December 2015 quarter would be keenly tracked to get trends of some improvement, which markets are looking for some time now. All in all, lots of expectations from the week and not sure what would be the driver in the immediate short term. A note of caution that the movement in midcap and smallcap must percolate to the large cap stocks as well, or, there could be concern.

Wishing all readers a great trading year 2016.

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