Markets continued their choppy and volatile behavior. They were negative at the end of four days and then Friday happened, when for the first time it looked as if the Iran-US war would have an agreement on the weekend. Wonder why? The G-7 meets in the early part of the week in France and Donald Trump has to have something to talk about. Even though on the one hand a peace agreement is talked about, even as this article is being written on Sunday morning, Iran has attacked US assets in the Middle East. Iran knows how to pile on the pressure. It’s not a done deal till it’s signed and Iran has the upper hand.

BSESENSEX gained on three of the five trading sessions while NIFTY gained on two of the five trading sessions. BSESENSEX gained 1,284.61 points or 1.73% to close at 75,527.95 points while NIFTY gained 256.20 points or 1.10% to close at 23,622.90 points. BANKNIFTY gained 2,318.55 points or 4.25% to close at 56,814.80 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.97%, 0.67% and 0.57% respectively. BSEMIDCAP lost 2.73% while BSESMALLCAP was down 2.35%. The intraweek high and low on BSESENSEX and NIFTY were at 75,608.02 points and 23,645.35 points, and 73,318.94 points and 23,070.15 points respectively. The lows were made on Monday while the highs were made on Friday. In what is significant is that markets were negative at the end of Thursday and it is Friday’s rally of 1,695 points on BSESENSEX and 461 points on NIFTY on Friday, which actually turned the tide.

The Indian Rupee rallied strongly on the fall in the price of crude and gained 12 paisa or 0.13% to close at Rs 94.83 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It was up 335.48 points or 0.66% up to close at 51,202.26 points.   

There were two mainboard listings during the week gone by. The first was from CMR Green Technologies Limited which had allotted shares at Rs 192. Shares listed on Wednesday and opened at Rs 275.40 on BSE and Rs 268 on NSE. They closed at the lower circuit of the day at Rs 247.90 on BSE and Rs 241.20 on NSE. While the share gained Rs 55.90 on BSE and Rs 49.20 on NSE, the record book will say that shares closed at lower circuit. By the end of the week, the shares gained further to close at Rs 252, a gain of Rs 60 or 31.25%.

The second share to list was Hexagon Nutrition Limited which had issued shares at Rs 45. The share listed on Friday and closed at upper circuit of Rs 50.39, a gain of Rs 5.39 or 9.54%.

Markets were week during the opening of the week, yet levels of 23,000 points held strong and were not violated. The support for next week therefore exists at the levels of 23,000 points and lower at 22,800 points. With NIFTY making a high of 23,645 points and closing at 23,622 points, first resistance comes at levels of 23,800 and further higher at 24,250 points.

Coming to the markets, G-7 will be held between 15th and 17th June in Evian in France. Donald Trump has to talk about how great his diplomacy is and therefore he will do everything in his power to prove that the Iran-US war is resolved. This is probably an agreement to be finalized over the next 60 days. The key factor is that oil prices have begun to soften and that would be a relief to world markets. In news of market relevance, USA has become the world’s top exporter of crude for the 3rd consecutive month in a row. They have sold oil from their strategic reserves and have timed the same to perfection with the Iran deal.

Updating Article

Iran and the US have agreed to a ceasefire and would sign an accord on the 19th of June. The stumbling block could be Israel and its continued aggression on Lebanon. While Trump will have something to talk about at the G-7, it is not a signed deal as yet. 

While Monday morning is likely to see fireworks, Trump being Trump, one needs to hold your horses. The strategy would be to continue with intraday trades and avoid large overnight positions for the coming week. G-7 summit will be crucial and important.

Trade cautiously.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)