Markets continued remaining super volatile and maintaining one eye on the Strait of Hormuz and the other eye on election results of the five states which were declared on Monday. Markets gained on three of the five trading sessions with Wednesday seeing sharp gains. BSESENSEX gained 414.69 points or 0.54% to close at 77,328.19 points while NIFTY gained 178.60 points or 0.74% to close at 24,176.15 points. BANKNIFTY gained 447.20 points or 0.82% to close at 55,310.55 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.20%, 1.51% and 1.89% respectively. BSEMIDCAP gained 3.11% while BSESMALLCAP was up 4.49%. The top sectorial gainer was BSEAUTO which was up 4.88% while the top loser was BSE OIL & GAS which was down 0.97%.

The Indian Rupee gained 62 paisa or 0.65% to close at Rs 94.30 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It gained 109.89 points or 0.22% to close at 49,609.16 points.

There was one listing which happened on the mainboard on Friday. Shares of OnEMI Technology Solutions Limited which had issued shares at Rs 171, had a decent debut. Shares closed at Rs 208.40, a gain of Rs 37.40 or 21.87%. There are no IPO’s on the main board during this week.

Election results threw up plenty of surprises with three states out of five seeing the incumbent lose. The ruling TMC lost West Bengal and was replaced by BJP which secured its first ever mandate and secured a 2/3rd majority. The same happened in Keralam where the ruling LDF lost to UDF with a similar landslide. In Tamil Nadu both the Dravidian parties DMK and AIADMK lost and the winner was Tamil film star Vijay who had launched his own party TVK. In Assam, the ruling NDA gained further and one saw the Congress and other opposition parties lose. In Puducherry the ruling NDA won.

How would this impact markets. While Tamil Nadu which is a highly pragmatic and industrialized state, one would see how things shape up. In West Bengal with growth and development missing over the last 15 years, one would expect large scale development to now happen. Even the border is expected to be fenced which would help in roping in infiltrators from across the border. All of this will take time but expectations will start building up.

The war front seems to have no clarity. The only thing for sure is that Iran is getting greater support than what USA is able to garner. Settlement would happen only on terms of Iran as USA is getting into a corner every day. To make matters worse, USA seems to be saying different things every other day.

Markets are in a broad trading zone and need to breakout for a meaningful upside. BSEMIDCAP and BSESMALLCAP have been consistently performing and the same is something which is beyond expectation. One needs to look for stock ideas of companies which are performing and do not have any great FII influence in them. If that be the case, one can look at buying such stocks and investing in them for some time rather than looking at mere trading opportunities.

The upside resistance is at levels of 24,400 and then around 24,600 on NIFTY. It is only if this level is breached and sustained that one should get bullish on large cap. On the support side, levels of 23,800 would act as solid support and if that were to break, level of 23, 300 points. Therefore the broad trading range is 23,300-23,800 and then 24,400-24,600 points.

Trade cautiously.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)