The week was led by gains made on Monday when we saw a strong gap up opening on account of the GST rejig that was announced during the extended weekend of the previous week. While markets rallied strongly through the week, a minor sell-off on Friday, erased almost all the gains made between Tuesday to Thursday. The week closed marginally higher than Monday’s close. This indicates that the big positive news of GST has been digested by the market. They gained on four of the five trading sessions and lost on one, Friday. BSESENSEX gained 709.19 points or 0.88% to close at 81,306.85 points while NIFTY gained 238.80 points or 0.97% to close at 24,870.10 points. BANKNIFTY lost 192.45 points or 0.35% to close at 55,149.40 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.13%, 1.22% and 1.36% respectively. BSEMIDCAP gained 2.03% while BSESMALLCAP gained 2.34%. The top sectorial gainer was BSEAUTO which gained a massive 5.06%.

The Indian Rupee was volatile and closed virtually unchanged, gaining 2 paisa or 0.02% to close at Rs 87.51 to the US Dollar. Dow Jones was flat to negative for the first four days of the week and then on Friday, it sky rocketed gaining a massive 846 points. This propelled Dow to a new all-time high. For the week in which Dow gained on three of the five trading sessions and lost on two, Dow was up 685.65 points or 1.53% to close at 45,631.74 points.

The main reason for the rally was the minutes of the FED meeting held July 29-30 were released. These indicate that FED could cut interest rates as early as in the meeting to be held in September, led to the sharp rally.

The primary markets would see as many as four listings on the main board happening this week. These are Vikram Solar, Patel Retail, Gem Aromatics and Shreeji Global. These issues would all list on Tuesday the 26th of August. For quick reference purposes, the allotted price of these issues would be Rs 332 for Vikram Solar, Rs 325 for Gem Aromatics, Rs 255 for Patel Retail and Rs 252 for Shreeji Global.

The week ahead has a trading holiday on Wednesday the 27th of August for Ganesh Chaturthi, the day Lord Ganesh is brought home to millions of Indians. He will be prayed, revered, pampered for a period of 1 to 11 days before he would be immersed in the sea, river or even makeshift pond with full fanfare. It is an event which began in Mumbai but is now celebrated across the country.

The mid-week holiday would upset trading for the week, particularly because the next day after the Ganpati holiday would be expiry day on Thursday the 28th of August. NIFTY in the August series has not done much and is up a mere 101.75 points or 0.41% at 24,870.10 points. The series had begun at a level of 24,768.35 points. With three days to go for expiry, the series is well and truly open and both the bulls and bears have an equal chance to take the series. It would be a close finish for sure.

In global news, a lot is happening with Trump continuing to feel that India has cheated him of winning the Nobel Peace prize which seems to have become an obsession with him. This is translating into irrational comments and actions as far as trade with India is concerned. While a cursory miffed comment would be in place, continuing his tirade and expressing displeasure on something which he never did, has upset a relationship made over five different presidents of the US. He has achieved what would have been impossible for others to achieve, of breaking trust of being a reliable and trustworthy ally. He has also pushed India to aligning much closer with Russia and getting closer to China as well. Something that the US certainly did not foresee or desire. Anyway, the tongue is something which is difficult to control when you are as old as Trump is. It tends to slip.

Key levels for the markets on the upside are at 25,150-25,200 and higher up at 25,500 points around. One needs big news to break 25,200 and move to higher level. GST which could be a trigger is happening in the following week and the Russia-Ukraine settlement is moving further away with Ukraine attacking on Sunday (24th August) a nuclear power plant on the border with drones. There will be retaliation for sure and that would be bigger than what Ukraine did. On the support side, levels of 24,800 around would act as a pivot and level of 24,500 would act as support.

The trading strategy would be to keep positions light in view of the mid-week holiday on Wednesday followed by Thursday’s expiry. There would be plenty of intra-day volatility to allow money making opportunities. It is also a good time to look at portfolio building.

Trade cautiously.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)