The week gone by had a trading holiday on Friday on account of India celebrating its 79th Independence Day on Friday the 15th of August. It was one where there was lot of expectancy on the geo-political front as well. While it could be termed as work in progress, nothing dramatic or really positive happened. At the end of trading, markets gained on three of the four trading sessions and lost on one. BSESENSEX gained 739.87 points or 0.93% to close at 80,597.66 points while NIFTY gained 268 points or 1.10% to close at 24,631.30 points. BANKNIFTY gained 336.95 points or 0.61% to close at 55,341.81 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.13%, 1.08% and 1.07% respectively. BSEMIDCAP gained 0.92% while BSESMALLCAP was up 0.37%.

The Indian Rupee gained 17 paisa or 0.19% to close at 87.53 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It was up 770.51 points or 1.74% to close at 44,946.12 points. Dow is a little over 100 points away from its lifetime high which is at 45,073.63 points made on 4th December 2024. The Putin-Trump meeting at Anchorage in Alaska was not an outcome which the street was expecting. With Zelenskyy and EU leaders to meet Trump in the US today (Monday), markets will be kept on tenterhooks.

As far as India is concerned, the news to rejig GST rates is big news for the markets. The 12% and 28% tax rates are proposed to be scrapped. While the rational for doing the same is great, there could be opposition from the opposition states as their share of collection would go down. The opening rally would be great for the markets but there could be a setback when the GST council meets in the latter half of the week on Thursday.

On the flip side, the proposed trade talks between India and the USA have been called off and no new date has been announced as of now. This could be a short term dampener for markets after a strong rally.

We had two IPOs listing on Thursday the 14th of august. The first was JSW Cement Limited which had issued shares at Rs 147. After the discovered price of Rs 153, the share lost its way and closed lower at Rs 146.05, a loss of Rs 0.95 or 0.65%.

The second share to list was All Time Plastics Limited which had issued shares at Rs 275. The discovered price was Rs 314.30 but the closing price was Rs 283.25. The gain was Rs 8.25 or 3%. It could be said that the listings were subdued and somewhere or the other there is a fatigue factor in the primary markets which seems to be setting in.

The week ahead has a spate of public issues with four issues opening on Tuesday the 19th of August and closing on Thursday the 21st of August. The first is from Vikram Solar Limited, followed by Gem Aromatics Limited, Patel Retail Limited and Shreeji Shipping Global Limited.  

Coming to the markets in the week ahead, expect them to open with a huge gap up opening. Whether they are able to gain further would be an important issue. The sustaining of the gap-up opening would be dependent on global cues coming from Trump-Zelenskyy meeting and rapid developments thereafter. There would be hope that the additional tariffs on India may not be imposed. Expect strong support at levels of 24,200-24,300 on NIFTY and resistance at 25,200 or thereabouts. This would be a good trading week for people looking to make short term gains.

The key events would be two-fold. Firstly, tariffs which are linked to the Russia and Ukraine war and therefore India as we are close to Russia and secondly, the impact of GST changes once they are approved in course of time in the GST council. Both would have far reaching consequences on the markets. Take it as the news comes. Importantly, it’s all work in progress, with nothing finalized.

Trade very cautiously.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)