Markets were under pressure last
week and failed to recover from the onslaught they faced on Monday because of
rising covid-19 cases all over the country. They were marginally up on Tuesday,
recovered ground on Wednesday, were again marginally up on Thursday and slipped
on Friday. The week saw BSESENSEX register losses of 438.51 points or 0.88% to
close at 49,591.32 points. The broader markets saw BSE100, BSE200 and BSE500
gain 0.04%, 0.22% and 0.39% respectively. BSEMIDCAP was up 1.20% while
BSESMALLCAP was up 2.49%. The top sectoral gainer was BSEMETAL up 6.80%
followed by BSEHEALTHCARE 5.56% and BSEIT 4.89%. The top loser was BSEBANKEX
down 3.84%.
The Indian Rupee was under severe
pressure and lost Rs 1.64 or 2.24% to close at Rs 74.74 to the US Dollar. Dow
Jones hit yet another lifetime high of 33,811 before closing at 33,800.60
points, a gain of 647.39 points or 1.95% for the week.
RBI had its monetary policy
review meet for the week between Monday the 5th of April and
Wednesday the 7th of April kept policy rates unchanged on expected
lines. The Repo rate would continue at 4.00% while reverse repo would be at
3.35%. Further the stance would continue to remain accommodative. Incidentally
this was the fifth consecutive meeting where rates have remained unchanged.
Readers would be aware that
Oriental Bank of Commerce and United Bank of India have been merged with Punjab
National Bank. Post the merger two things have happened where the name of the
bank has changed to Punjab National Bank and the first four letters of the IFS
Code have been changed to read as PUNB. No other change in any numbers has been
done. All bank account holders of the erstwhile Oriental Bank and United bank
have to run from pilar to post in times of pandemic and change the KYC at various
places whether it be trading accounts, bank mandates, insurance policies, demat
accounts etc. it would be humbly requested to RBI that they pass a notification
requesting all concerned to replace the name of the bank and the first four
letters of the IFS Code and finish the formality. In case there is a change in
code itself than the concerned individual may approach the bank. This simple
notification would save lacs of account holders from untold misery. It may also
be mentioned that the same would be happening in the case of Syndicate Bank,
Corporation Bank, Andhra Bank and Allahabad Bank. One hopes RBI does look into
the issue and oblige.
On the primary markets front we
saw the issue from Barbeque Nation Hospitality Limited list on Wednesday the 7th
of April. The discovered price was Rs 492 against the issue price of Rs 500.
They then rose to hit the high of Rs 590.40 which was the upper circuit of the
day and remained locked at that price. Incidentally the upper circuit was hit
around 10.30 am in the morning and remained so. Very clearly the difference
between the weighted average of Rs 559.37 on BSE and Rs 543.40 on NSE and their
respective closing prices, indicate that the short sellers were caught on the
wrong foot. The share rose further on the remaining two days of the week and
closed at Rs 722.05, a gain of Rs 222.05 or 44.41 %.
The mega issue from Macrotech
Developers Limited to raise Rs 2,500 crs from a fresh issue was oversubscribed
1.37 times. The price band was Rs 483-486. The QIB portion was subscribed 3.06
times, HNI portion was subscribed 1.45 times, Retail portion was subscribed
0.40 times while the Employee quota was subscribed 0.17 times.
Covid-19 is becoming worrisome
and new mutants and strands seem to be emerging in different parts of the
world. India has again crossed Brazil and is now the country having the second
highest number of cases. The world saw 13,66,36,292 patients, 29,49,390 deaths
and 10,98,65,012 patients recovering. In India we saw 1,35,25,379 patients, 1,70,209
deaths and 1,21,53,713 patients recovering. Compared to the previous week, the
world saw 47,28,203 new patients, 83,473 deaths and 36,69,693 patients
recovering. In India we saw 9,37,459 new patients, 5,077 deaths and 4,73,755
patients recovering. The rate of new patients has gone up alarmingly and its
time that we as individuals step up our efforts to maintain social distancing
at all times.
Maharashtra government is
contemplating imposition of complete lockdown for about 10-15 days and would
take a final decision on the same on Monday the 12th of April.
Whether it does go for complete lockdown or a partial one, it is bound to upset
the markets which are in any case very delicately poised. Readers would recall
that markets had reacted last Monday quite sharply to the rising covid-19
cases. Either which way they are likely to be on tenterhooks till the outcome
of the meeting is disclosed and then react depending on the outcome.
Markets have been fairly range
bound between 48250-50500 on the BSESENSEX and 14250-14900 on NIFTY. Each time
they come closer to either of these levels they seem to be reacting in the
opposite direction. Very clearly for a change in trend or a bigger move, one
needs to see markets move beyond these levels. The week ahead sees the three IT
majors declaring their results. TCS on Monday, Infosys board meets on Tuesday
and Wednesday and Wipro on Thursday. Wednesday is also a market holiday. This
effectively divides the upcoming week into two equal halves of two days each
which would make markets quite tentative and nervous. While the IT sector has
gained considerable ground in recent times, particularly last week, the majors
declaring results would give a direction to IT performance in the coming
quarters and year. While IT, healthcare and metal seem to be on a roll, one is
not sure how some of the other sectors would perform.
It makes sense to play safe in
the coming week and not over commit in either direction. Levels mentioned above
are quite crucial and once violated in either direction could see sharp moves.
Stay light and use rallies to book profits. Hopefully, during the course of the
week, markets would decide on a trend. In case we see markets falling very
sharply say over 2%, selective buying may be initiated.