An eventful week passed on the bourses. Monday the 20th of October was the last day of Samvat 2081. Tuesday was just one hour of ‘Muhurat’ trading for the beginning of Samvat 2082. This was the first time since I remember (over 35 years) that Muhurat trading was conducted in the afternoon, between 1.45 pm and 2.45pm. Typically since time immemorial this was always conducted in the evening between various times of 5pm to 7pm for one hour. One should hope and pray to Goddess Laxmi that this new change brings prosperity to all. This was followed by a holiday on Wednesday. When markets were to reopen on Thursday the 23rd of October, GIFTNIFTY had gone crazy on expectations that the US-India Trade deal would be signed right away and gains indicated that we were at an all-time high. Nothing of that sort happened. Neither the trade deal, nor the new high and we are still awaiting the trade deal. Will it happen this week? Your guess is as good as mine. Suffice to say that Trump loves to be on front page all the time in not only the USA but all other countries as well.

One stark highlight of last week’s trading was the attempt markets made every trading day to simply run away, and failing to do so on even one of the four trading sessions. Markets corrected from the intraday highs on all the four sessions and were under pressure. Results season is on, but early indications do not point to a block buster results season.

BSESENSEX gained 259.69 points or 0.31% to close at 84,211.88 points while NIFTY gained 85.30 points or 0.33% to close at 25,795.15 points. BANKNIFTY lost 13.75 points or 0.02% to close at 57,699.60 points. BSEMIDCAP was up 0.51% while BSESMALLCAP gained 0.90%. The broader indices saw the BSE100, BSE200 and BSE500 gain 0.33%, 0.32% and 0.36% respectively. Indian Markets gained on three of the four trading sessions and lost on one.

The Indian Rupee gained 19 paisa or 0.22% to close at Rs 87.76 to the US Dollar. Dow Jones gained on four of the five trading sessions and lost on one. It was up 1,016.51 points or 2.20% to close at 47,207.12 points. Dow has been making new highs and the latest intraday high is at 47,326.73 points.

The IPO season after a brief lull of under a week is back. We have three IPOs slated to open next week as of date with Orkla India Limited looking to raise through an OFS in a price band of Rs 695-730, approximately Rs 1,665 crores. The PE multiple of the issue is 37.2-39 based on the EPS of Rs 18.7 for the year ended March 25. The company had earned an EPS of Rs 18.7 for the year ended March 25. The issue would open on Wednesday the 29th of October and close on Friday the 31st of October.

The second issue is from Studds Accessories Limited which is looking to tap the markets with its IPO which would open on Thursday the 30th of October and close on Monday the 3rd of November. The issue is entirely an offer for sale and there would be 77, 86,120 shares on offer. The price band of the issue is Rs 557-585. The PE band is 31.47-33.05 based on the EPS of Rs 17.7 for the year ended March 25. At the top end of the band, the issue would raise Rs 585 crores.

The third issue is from Lenskart Solutions Limited. The issue is slated to open on Friday the 31st of October and close on Tuesday the 4th of November. The issue consists of a fresh issue of Rs 2,150 crores and an offer for sale of 13.22 crore shares in a price band of Rs 382-402. The total issue would be approximately Rs 7,500 crores at the top end of the price band. The PE multiple for the issue is a staggering 217.05-228.41 times the EPS of Rs 1.76.

The week ahead has October futures expiring on Tuesday the 28th of October. The current level of NIFTY at 25,795.15 points is 1,184.05 points or 4.81% higher than the start of the series at 24,611.10 points. The bulls have the series completely under their grip and there is no way that markets could see a loss of 1,200 points in 2 days. This series would be a bull’s story and while it was choppy and volatile, the series has seen the bulls adding to their kitty as the month progressed. 

It’s high time that the India-USA trade deal gets finalized. A lot is at stake and it appears the US President is hell bent on using this tariff tool as a ploy to remain on center stage globally. So far he is succeeding and to add to his theatrics, he seems to be travelling all over the world as well. Currently he is on a tour to Malaysia and would be visiting Japan and South Korea thereafter. His visit to South Korea would hopefully see some resolution on the contentious tariff issue with China. Russian oil has been sanctioned and India appears to have slowed down its purchases as seen optically. Final impact would be known only after Trump visits South Korea and meets the Chinese counterpart.

Coming to our markets in the week ahead, we made a valiant attempt to make a new all-time high but failed to do so. The news flow anticipated just did not materialize. When it would happen is actually a million dollar question. What it has however done is opened up the markets with the range expanding. The intraday NIFTY high for the week was at 26,104.20 points while the close was at 25,795 points, a difference of 300 points which considering the Diwali week was huge. Resistance levels would now be at 26,150-26,250 points on NIFTY and support at 25,300-25,400 points. Levels of 25,500-25,550 would act as a pivot with sharp two sided moves in either direction taking place.

The strategy would be to keep overnight positions light as the trade talks could be near completion and with Trump in Asia, he may announce them. If the policy is announced it has to be positive for India as without that being so, expect the government of the day not to sign. The biggest negative currently is the waiting pangs.

Trade cautiously.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)