It's tough to catch up

With the markets going nowhere, press the caution button in a listless, lackadaisical time

The markets were under pressure last week and lost some ground at the opening itself. Though they tried to recover in the latter part of the week, it remained difficult trying to catch up. The week ended with the BSE SENSEX losing 378.12 points or 1.48 per cent at 25228.50 points and NIFTY losing 116.35 points or 1.48 per cent at 7,733.45 points. The broader markets saw the BSE100, BSE200 and BSE500 lose 1.42 per cent, 1.29 per cent and 1.29 per cent respectively. BSEMIDCAP lost 0.70 per cent and BSE SMALLCAP was down 1.10 per cent. In sectoral indices, there were no gainers. However BSE CAPGOODS lost the least and was down 0.36 per cent. On the losing side, were BSEMETAL down 3.60 per cent, followed by BSEBANKEX down 3.01 percent. BSEIT lost 2.54 per cent and BSEPSU and BSETECH lost an identical 2.49 per cent.

Union Finance Minister Arun Jaitley with British High Commissioner to India, Sir Dominic Asquith at a meeting in New Delhi. Pic/PTI

Stocks
In individual stocks, the top gainer was HDFC up 7.25 per cent, followed by Gail 6.62 per cent on the back of their proposed part divestment through IPO in Mahanagar Gas, who supplies piped gas and CNG in Mumbai. The losers were led by ICICI Bank down 7.80 per cent, Dr Reddy 7.30 per cent and SAIL 10.78 per cent. PSU banks lost quite a bit with Canara Bank down 8.18 per cent, Union Bank 7.73 per cent, PNB 7.18 per cent and Bank of Baroda 4.72 per cent. None of the PSU banks have declared results as yet, and it would be of interest to see how the NPA’s fare this final quarter of 2016. The Dow Jones was virtually flat and lost a tad, down 33.01 points or 0.19 per cent at 17,740.63 points. The Indian Rupee lost 22 paisa or 0.33 per cent to close at Rs 66.55.

Listing
Two issues would list in the coming week. Thyrocare Technologies had issued shares at Rs 446. The issue was very well received and in the retail portion, the allotment is 13 successful out of 80 applicants. The grey market in the scrip is quite active, and, current indications are that the premium is about Rs 240 or more than 50 per cent. The issue lists on Monday, May 9. The second issue to list would be Ujjivan Financial Services Limited, which has allotted shares at Rs 210 and is in the microfinance space. The issue was very well received and roughly 32 applicants out of 100 were allotted shares. The grey market premium here is about Rs 55 or over 25 per cent. Call it coincidence, the premium in the case of the earlier microfinance company Equitas, was also in similar percentage terms.

Parliament is partially functioning, and, legislative business is happening in fits and starts unlike previous sessions. It appears that the strategy of keeping the offensive and making the opposition party defend, is paying off. While the opposition walks off sporadically, unlike previous occasions, they have to do so all alone. By the time we approach the next week, elections to five states would almost have come to an end, and people would be awaiting the results.

Direction
Markets are not going anywhere and results season, which enters the last phase of the reporting season have not produced any change in trend. While there are some surprises which are positive and some negative, by and large results are on expected lines. PSU bank results would be interesting to see whether the clean-up of books is completed or not. News from Parliament and the outbreak of monsoon in Kerala would be the key drivers in an otherwise listless and range bound market. Traders are advised caution.

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.

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