Market fall and FPI selling which is now over 45 days old continued but seems to have slowed down. How long? Not sure. Markets were flat on one day and lost on three sessions. The only difference this week was that BSESENSEX closed flat with minor gains on one day while NIFTY closed flat with minor losses on one day. Otherwise, it was a normal week with correction continuing. BSESENSEX lost 1,906.01 points or 2.40% to close at 77,580.31 points while NIFTY lost 615.50 points or 2.55% to close at 23,532.70 points. The broader markets saw BSE100, BSE200 and BSE500 lose 2.64%, 2.75% and 2.98% respectively. BSEMIDCAP was down 3.89% while BSESMALLCAP lost 4.61%. The lows made last week on the bourses were at 77,424.81 points on BSESENSEX and at 23,484.15 on NIFTY.
The Indian Rupee lost 1 paisa or 0.01% to close at Rs 84.39 to the US Dollar. Dow Jones gained on two of the five trading sessions and lost on three. Dow Jones lost 544 points or 1.24% to close at 43,444.99 points.
It was a week of listings on the bourses and suffice to say, it was not the best one could have hoped for. The first to list was Sagility India Limited which listed on Tuesday the 12th of November. The company had issued shares at Rs 30. The discovered price was Rs 31.06. the closing price on listing day was Rs 29.36, a loss of Rs 0.64 or 2.01%. Over the next two days the share lost further ground to close at Rs 28.51. a loss of Rs 1.49 or 4.97%.
The second share to list was Swiggy Limitred which had issued shares at Rs 390. The share listed on Wednesday the 13th of November. The discovered price was Rs 412. The closing price on day one was Rs 455.95, a gain of Rs 65.95 or 16.9%. The share lost some ground on Thursday and closed at Rs 429.65, a gain of Rs 39.65 or 10.22%.
The third share to list was Acme Solar Holdings Limited which had issued shares at Rs 289. This share too listed on Wednesday the 13th of November. The discovered price was Rs 259. The share closed at Rs 253.50 on listing day, a loss of Rs 35.50 or 12.28%. It lost further ground on Thursday to close at Rs 229.00, a loss of Rs 60 or 20.76%.
The fourth and final share to list was Niva Bupa Health Insurance Company Limited which listed on Thursday the 14th of November. The issued price was Rs 74. The discovered price was Rs 78.50 while the closing price was Rs 74, flat.
The current lot of IPOs have been struggling and subscription levels for the issues are not as before, simple reason being that post listing they are not making returns to investors, or are lower than normal. To compound matters, there is also a fatigue factor affecting them.
Markets seem to be drifting downwards. A couple of important supports have broken and we have two more important supports coming up. If these were to get violated we could see round two of correction on the bourses. The first major support would be in the band of 23,100-23,200 points and the second would be in the region of 22,500-22,600 points. These would correspond to 76,400-76,600 as the first level and 74,600-74,900 on BSESENSEX. On the resistance side, first levels are at 23,800-850 and then at 24,100-24,200 points on NIFTY. These would correspond to 78,400-78,500 and 79,300-79,550 on BSESENSEX.
Markets have a trading holiday on Wednesday as Mumbai and Maharashtra vote on Wednesday the 20th of November. This would break the momentum and could see positions being reduced on Tuesday. The good part is that exit polls for Jharkhand and Maharashtra would be announced on the evening of 20th November post the polls. If the BJP led NDA were to do well in these elections, this could be the short term trigger that the markets are looking for. Otherwise, poor results, FPI selling, Dow having run ahead of realty and now likely to correct till the administration starts delivering, are enough reasons to keep the markets under pressure.
The strategy in this four-day week would be to keep positions light and await election results on Saturday the 23rd of November. While exit polls are an indication, we have seen in the recent past how misleading they could be.
Trade cautiously.