Markets were in fine fettle and gained on expected lines. They almost recovered the entire losses they suffered in the previous week. BSESENSEX gained 2,034.87 points or 2.68% to close at 28,094.64 points while NIFTY gained 616.15 points or 2.59% to close at 24,383.60 points. BANKNIFTY gained 571.35 points or 1.01% to close at 57,264.85 points. The broader markets saw BSE100, BSE200 and BSE500 gain 2.65%, 2.47% and 2.39% respectively. BSEMIDCAP was up 1.67% while BSESMALLCAP was up 0.63%. The top sectorial gainer was BSEAUTO which gained a massive 5.89% while the top loser was BSEPOWER, down 0.70%. Markets gained on four of the five trading sessions and lost on one session. The intraweek high on BSESENSEX and NIFTY were made at 78,272.25 points and 24,429.40 points, while the lows were made at 76517.85 points and 23,891.95 points. The lows were made on Monday while the highs were made on Friday, giving a possible direction and indication that there is more steam left in the markets in the coming week.

The Indian Rupee gained Rs 1.19 or 1.23% to close at Rs 95.49 to the US Dollar. Dow Jones gained 537.78 points or 1.04% to close at 52,485.03 points. Dow gained on three of the five trading sessions and lost on two. The FED kept interest rates unchanged for the fifth consecutive time by a split 9-3 vote. The verdict indicates that the FED is certainly going to raise interest rates in the coming meetings and would be more likely than just once. Inflation would be the reason for the same. Markets fell very sharply post the announcement on Wednesday and lost 1,153 points. US 10 year bond yields are trading at levels of 4.718% after hitting a high of 4.745%. The rate is almost a percent higher than the FED interest rate. 

The week gone by had three main board listings and all of them happened on Thursday the 30th of July. The first of the lot was Indo-MIM limited which had issued shares at Rs 485. The share closed day one at Rs 741.80 and gained further on Friday to close at Rs 774, a gain of Rs 289 or 59.59%.

The second to list was machinery manufacturer Lohia Corp from Kanpur who had issued shares at Rs 425. The share closed listing day at Rs 494.65 and gained further to close at Rs 534.40, a gain of Rs 109.40 or 25.74%.

The third and final share to list was Xtranet Technologies Limited which had issued shares at Rs 127 and closed debut day at Rs 124.80. The share recovered marginally on Friday and closed at Rs 126.60, a loss of Rs 0.40 or 0.31%.

Tuesday the 28th of July saw NIFTY July futures expire on a positive note. The series was running neck to neck and the bulls pulled it off. The series gain was 119.60 points or 0.50% to close at 23,985.35 points. The July series had begun at levels of 23,865.75 points.

The week ahead sees many mainboard IPO’s opening and even more planning their road shows. The issue from Manipal Health Enterprises Limited closed on Friday and was subscribed 5.12 times overall. The issue from M V Electro systems Limited is currently open and would close on Monday the 3rd of august. The issue is subscribed 12.97 times. Similarly the issue from Juniper Green energy Limited would also close on Monday the 3rd of august and is currently subscribed 0.49 times.

Upcoming issues in the week ahead include Ardee Industries, Technocraft Ventures Limited, Leap India Limited and Molbio Diagnostics Limited.

There will be a flood of IPO’s in the month of August and it would be a time to pick and choose from issues galore.

Coming to the markets in the week ahead, it could be a make or break week. Over the previous week, markets have held there stead and made a good base from where there could be an upward move. The breakout point would be at levels of 24,600 points on NIFTY. Support at the immediate levels are at 24,000-24,100 points and further below at 23,800 around. On the upward side level of breakout is at 24,600 points. If we were to see that happen, markets could give another 200-300 points move and make a new base. For any such move we need geo-political stability and positive news as well.

The strategy would be to go long and remain long with moving stop losses and refraining from large overnight positions as we all know that announcements from the US are driven on ‘self-trades’. One needs to be cautious in such situations.

Trade cautiously.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)