Geo-politics alone seem to be the driving force behind markets. Israel and the USA took the world to war which no one except they wanted, and now after five weeks, USA has called a fragile truce for negotiations. After 21 hours of negotiations, talks have been called off without any agreement. We should brace for many such rounds before anything definitive does come out. The only good part was that as a result of the cease-fire we had the best week in the markets in over five years.

BSESENSEX rose on four of the five trading sessions and lost on one. It gained a massive 4,230.70 points or 5.77% to close at 77,550.25 points while NIFTY gained 1,337.50 points or 5.89% to close at 24,050.60 points. BANKNIFTY gained 4364 points or 8.47% to close at 55,912.75 points. The broader markets saw BSE100, BSE200 and BSE500 gain 6.19%, 6.51% and 6.59% respectively. BSEMIDCAP gained 7.64% while BSESMALLCAP gained 7.45%.

The Indian Rupee gained Rs 2.16 or 2.28% to close at Rs 92.57 to the US Dollar. Dow Jones gained 1,411.90 points or 3.04% to close at 47,916.57 points. Dow gained on three of the five trading sessions and lost on two.

A strange phenomenon has happened in the markets during March and April. In the week of 9th March-13th March, we had the worst week in Indian markets over six years. We lost 4,354.98 points on BSESENSEX and 1,299.35 points on NIFTY. Three weeks later, in the week of 6th April to 10th April, we had the best week in over five years. BSESENSEX gained 4,230 points while NIFTY gained 1,337 points. Almost similar in points comparison. Such volatility clearly shows how volatile markets have become. They need a faint hope to go up and one piece of bad news to come crashing down. It also reflects market uncertainty and hopes and expectations of a settlement. Well 21 hours of discussion have yielded nothing as finality and we would have to wait for a new date.

In primary market news we had one small IPO from Om Power Transmission Limited which has opened on 9th of April. The issue would close on Monday the 13th of April. The price band of the issue is Rs 166-175 and the total issue size is Rs 150.06 crores. At the end of two days, the issue is subscribed 0.71 times.

The week ahead has a holiday on Tuesday the 14th of April. This will make markets volatile and nervous in the second half of the day and would see people reducing positions to carry forward. The peace talks being a non-starter would add to the pressure as markets had risen very sharply into the days leading to the peace talks.

Levels of 24,400-24,500 would act as resistance on any upside that markets may attempt to make. If for any reason they are successful in breaking these levels, the next stop would be around 24,800 points. On the downside we have support at 23,500-23,600 points and lower down at levels of 23,000-23,100 points. The strategy for the week would be to keep low overnight positions as the current war like situation is far from over. The rally witnessed was led by short covering and expectations that things would get resolved. Nothing of that has happened as yet. Before the next round of hype on resolution, we will have to correct, re-price uncertainty, before yet another rally happens on expectation.

Tough, turbulent times ahead.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)