It was a short week but tough one. Markets gained on three of the four sessions and lost on one. Yet markets ended in the negative simply because the fall on Tuesday was deep. BSESENSEX lost 354.49 points or 0.47% to close at 74,559.37 points while NIFTY lost 88.70 points or 0.38% to close at 23,346.40 points. BANKNIFTY lost 247.85 points or 0.44% to close at 56,385.70 points. The broader markets saw BSE100, BSE200 and BSE500 lose 0.57%, 0.47% and 0.41 % respectively. BSEMIDCAP was down 1.82% while BSESMALL lost 2.21%. The highs of the week were made on Tuesday and the lows were made on Wednesday. The levels were at 75,436.44 points and 73,981.33 points on BSESENSEX and at 23,592.85 points and 23,116.10 points on NIFTY. What is important to note that though markets were under pressure, they did not break key support levels and they have become fairly range bound with a 1500 point movement on BSESENSEX and about 470 points on NIFTY.

The Indian Rupee lost 42 paisa or 0.44% to close at Rs 95.98 to the US Dollar. Dow Jones lost on four of the five trading sessions and gained on one. It lost 890.65 points or 1.69% to close at 51,682.64 points. The US FED has raised interest rates to a band of 3.75%-4% at its review meeting. From the minutes of the meeting it appears that there would be one more rate hike at least, considering the steep rise in inflation in the US. It is heartening to note that the new chief of the US Fed has done the natural thing and not listened to the dictate of US President that rates be lowered.

Looking at what is happening across governments and central banks, expect India to raise rates in its next meeting to be held in October. Inflation is becoming a cause of concern and with the US –Iran war unlikely to end in a jiffy, and oil at 105$ plus, is a global cause of concern. In a couple of months we will start talking of winter setting in, adding to the demand of oil. All of this points to the US mid-term elections due in November and the possibility of Trump not doing well in them. This could lead to global pressure all over again.

The primary market juggernaut continues unabated. The mother of all issues, NSE Limited is currently open and at the end of 2 days is subscribed. The issue is subscribed 1.16 times with the issue closing on Monday the 21st of September. Currently the Retail portion is subscribed 0.72 times and offers subscribers an opportunity to acquire shares of a proxy play on the Indian economy. NSE has grown at a faster pace than the GDP consistently and with Indian GDP growth expected to continue to grow around 7-8%, this becomes an attractive play.

There is yet another interesting company tapping the markets in the next week. Elevate Campuses Limited is launching its IPO for Rs 2,100 crores in a price band of Rs 343-362. The issue would open on Wednesday the 23rd of September and close on Friday the 25th of September. The company owns, operates and manages on-campus student accommodation across higher education institutions and also owns K-12 assets.

The company reported revenues of Rs 401.8 crores in India and Rs 166.8 crores outside India. On a pro-forma basis, the EPS on a fully diluted basis was Rs 13.14. The PE at the cap price is 27.5. The objects of the entirely fresh issue is to buy the school assets from the group companies for Rs 1,100 crores and repayment of debt of Rs 750 crores. It’s an interesting business and merits attention whether from the IPO subscription basis or post listing.

Markets have held on to 23,000 level last week. Support continues to hover around 22,800 points and lower at 22,500 points. On the upside we have very strong resistance at 23,800 points and markets will have to do something spectacular to break the same.

The strategy, would be to continue to trade in the market place, buying on sharp dips and selling on rallies. A traders market at best. Hopefully the primary market pressure would end after next week for sure.

Trade cautiously.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)