Markets continued their upward trajectory and added to its gains. At one point of time BSESENSEX had crossed 80,000 and registered gains of 10,000 points since the low made on 4th of June when results for the elections were announced. Ten Thousand points or 14.28% is a spectacular gain by all standards and should be taken as a big positive. Markets are witnessing huge inflows where FPIs were caught napping with their bearish mindset and on the other hand domestic funds are flush with SIP funds which have now begun crossing Rs 25,000 crores monthly. At the end of the week, BSESENSEX gained 963.87 points or 1.22% to close at 79,996.60 points while NIFTY gained 313.25 points or 1.30% to close at 24,323.85 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.57%, 1.71% and 1.91% respectively. BSEMIDCAP gained 2.77% while BSESMALLCAP was up 3.88%. BSESENSEX gained on three of the five sessions and lost on two while NIFTY gained on four sessions and lost on one.
Benchmark indices made new lifetime highs and the intraday high on BSESENSEX was at 80,392.64 points and the closing high at 80,049.67 points, both of which were made on Thursday the 4th of July. NIFTY intraday high was at 24,401 points while closing high was at 24,323.85 points. The intraday high was made on Thursday while closing high was made on Friday.
The Indian Rupee lost 10 paisa or 0.12% to close at Rs 83.48 to the US Dollar. Dow Jones gained on three of the four sessions and lost on one. It was up 257.01 points or 0.66% to close at 39,375.87 points.
There is sector rotation happening and this week it was the turn of IT stocks. The BSEIT sector was the top sectoral gainer at 4.15%. Besides the IT stocks, initial momentum was given by HDFC Bank as the FPI limit dropped below 55% and fresh FPI buying emerged. This propped up the share which rose from Rs 1,684 to a high of Rs 1,792, before profit taking saw the share close at Rs 1,648, a weekly loss of Rs 36 or 2.14%.
The date for the Union Budget has been announced as Tuesday, the 23rd of July on expected lines. This week would also see July futures expire on Thursday the 25th of July, making that an extra volatile week. Keeping this in mind, the flow of IPOs on the main board seems to have taken a pause for the time being.
In primary market news, we had two listings and two issues opening and closing for subscription. The first share to list was Allied Blenders and Distillers Limited which listed on Tuesday the 2nd of July. The company had issued shares at Rs 281. On listing day, the closing price was Rs 317.85, a gain of Rs 36.85 or 13.11%. By the end of the week, the price had moved up to Rs 343.90, a gain of Rs 62.90 or 22.38%.
The second share to list was Vraj Iron and Steel Limited which had issued shares at Rs 207. The share listed on Wednesday the 3rd of July. The share closed at Rs 251.95, a gain of Rs 44.95 or 21.71%. Over the remaining two days, the price moved up to close at Rs 260.95, a gain of Rs 53.95 or 26.06%.
The first issue to open and close for subscription was from Emcure Pharmaceuticals Limited. The issue consisted of a fresh issue of Rs 800 crores and an offer for sale of 1,14,28,839 shares in a price band of Rs 960-1008. The issue was subscribed overall 68.4 times with QIB portion subscribed 191.24 times, HNI portion subscribed 49.32 times and Retail portion subscribed 7.36 times. There were 28.70 lakh applications in all.
The second issue was from Bansal Wire Industries Limited which was subscribed 62.76 times overall. The price band was Rs 243-256. The issue consisted of a fresh issue of Rs 745 crores. The QIB portion was subscribed 153.8 times, HNI portion was subscribed 54.21 times and Retail portion was subscribed 14.37 times. There were 21.65 lakh applications.
Markets need a correction to make them healthy. The timing is one which people are unable to guess. Whether there would be one before the budget or post the budget is a million-dollar question and has been speculated over the last couple of weeks. IT results would begin this week with TCS announcing them on Thursday the 11th of July. This would be a crucial result as IT stocks have run up quite sharply on the expectation that the turnaround in IT stocks as far as results are concerned is here. Only results would clarify the same.
FPI activity in the markets is still confusing as they are alternating between buying and selling. Over the last three days they were buyers in the cash market whereas on the previous three days they were sellers. Their short positions around the election results time have been reduced significantly.
Coming to the markets in the week ahead, expect sector rotation to continue. As a result, there would be volatility and sharp two-sided moves. In such a situation taking a call is always difficult and would require swift action to be taken. Market has momentum and plenty of participation with newer stocks participating. What it lacks is depth as on a number of days we saw the market declines overshadowing gains, indicating that a few stocks prop up the markets. In such a situation one needs to take some money off the table to invest if compelling opportunities present themselves.
With new highs once again being made, the mood and market optimism favor the bulls. However, the bears are waiting to put that one foot in the door and pounce on the bulls who seem to have used up almost all their resources. In the coming week I would expect the bears to make a comeback and gain control for the time being.
In conclusion, trade cautiously and as mentioned earlier expect sudden swings and change of mood in the markets.