The week gone by had a lot of action in which markets fell quite sharply. Friday was the worst day at start but things recovered in the end. At the end of it all, the week saw markets losing on four of the five trading sessions and gaining on just one. BSESENSEX lost 1,731.82 points or 2.26% to close at 74,914.06 points while NIFTY lost 502.80 points or 2.10% to close at 23,435.10 points. BANKNIFTY lost 763.10 points or 1.33% to close at 56,606.55 points. The broader markets saw BSE100, BSE200 and BSE500 lose 1.88%, 1.85% and 1.68% respectively. BSEMIDCAP lost 1.05% while BSESMALLCAP was up 0.10%. The highs and lows on the BSESENSEX and NIFTY were at 76,477.19 points and 74,160.16 points. On NIFTY they were at 23,890.00 and 23231.40 points. Incidentally the lows were made on Monday while the highs were made on Friday.

The Indian Rupee lost Rs 1.07 or 1.13% to close at Rs 95.56 to the US Dollar. Dow Jones lost on three of the four trading sessions and gained on one. It was down 840.96 points or 1.57% to close at 52,573.29 points.

Friday saw markets being hit by oil at close to $108-110 mark as Iran attacked the US Airbase in Jordan and caused heavy damage, (almost destroyed). The date, 9/11, 25th Anniversary. Strange coincidence but food for thought for technical analysts. US midterm elections are getting closer and there seem to be desperate measures being announced. The 5,000 dollar gift to every American if Trump and his party wins is a sad reflection to what USA has come down to. So be it.

It has been raining IPOs on the main board over the last four weeks or so. Since the 17th of August as many as 22 issues have listed on the main board. In the coming week there would be another 11 issues listing taking this number to 33 issues in five weeks.

The week ahead has the much talked about and awaited issue from NSE Limited hitting the markets. The issue is entirely an offer for sale of 12,64,36,650 shares in a price band of Rs 1,700-1,785. The issue would garner approximately Rs 22,562 crores at the top end of the price band. The issue would open on Thursday the 17th of September and close on Monday the 21st of September. The PE of the issue at the price band is 40.85-42.89. The issue is a proxy to the capital markets and the exchange is the dominant player in the capital markets with an overall market share of close to 90%. While the PE is lower than that of BSE, this becomes the upside for the investor going forward. There is no identifiable promoter and the company has 100% public shareholding implying that there would be no overhang of dilution for minimum public shareholding. However, post six months of listing there would be no lock-in of shares which could see shareholders exiting if prices have risen.

Three of the recently listed IPOs saw a major pump and dump exercise happening on Friday the 11th of September. These were Shankesh Jewellers, Sunshine Pictures and Molbio Diagnostics. Unprecedented volumes, huge volatility and most importantly price reversals were the order of the day. It’s time for investors to be cautious as this has become the order of the day.

The week ahead has a trading holiday on Monday on account of Ganesh Chaturthi. This is the day when Lord Ganesh is welcomed with open arms into millions of households across the country. He remains a royal guest for anything between 1-11 days before he is immersed in water whether it be the sea, lake or river. A most auspicious time for people from all religions.

The week gone by saw markets coming very close to the last bastion of 23,100 points and rebounding. This level of 23,100 would act as a strong support with a fall back to 22,800 points in case markets took a dive. On the upside we have resistance at 23,800 points, a level at which markets have bounced quite often.

The strategy would be to lie low and watch carefully. Markets cannot move up with oil around 108$, inflation rearing its ugly head and every possibility that a rate hike in the US is in the offing. If Trump manages to hold on to the rate hike, it could mean two, post elections. Use only sharp dips to make purchases or otherwise remain on the sidelines. Tough times ahead.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)