The week gone by saw markets rise on hope and expectation that things on the tariff front would improve. It does not necessarily happen so. On expected lines, the Nobel Peace Prize did not go to Trump. It went to Maria Corina Machado, a Venezuelan. One would have thought that India would have borne the brunt of the fallout, but it was China. Effective 1st November, a 100% additional tariff has been imposed on China. This has been done because China has put restrictions on the export of rare earth to countries in turn re-exporting products and rare earth products to the USA. What happened post this announcement was a massive fall on Friday of 878.82 points or 1.90% on the Dow. Ramifications of what Trump did on Friday late evening Indian time would be felt globally when markets open post the weekend.

BSESENSEX gained on four of the five trading sessions and lost on one. It was up 1,293.65 points or 1.59% to close at 82,500.82 points while NIFTY gained 391.10 points or 1.57% to close at 25,285.35 points. The broader indices saw BSE100, BSE200 and BSE500 gain 1.53%, 1.41% and 1.29% respectively. BSEMIDCAP gained 1.50% while BSESMALLCAP was up a mere 0.01%. The top sectorial gainer was BSEIT which was up 4.28%.

The Indian Rupee gained 13 paisa or 0.15% to close at Rs 88.64 to the US Dollar. Dow Jones was already under pressure during the week and then Friday happened. It lost 1,278.68 points or 2.73% to close at 45,479.60 points. Dow lost on all five trading sessions with Wednesday being virtually flat, with a net change of -1.20 points.

Primary markets are seeing issues opening and closing as if there is no tomorrow. Of the five issues which listed last week, three are trading below issue price while just two are above the issue price. Similarly of the ten issues to have listed from the 1st of October, six are trading below issue price and just four are above par. Sad state of performance. Very clearly there is a fatigue factor in the market. Yet the issue of L G Electronics India Limited saw a new benchmark being set when the issue saw subscription of Rs 4 lac crores. Tremendous liquidity no doubt. Tata Capital Limited would be listing on Monday while L G Electronics would be listing on Tuesday. The best that could be expected from Tata Capital is a muted listing and I am sure nobody would be more than happy if the issue closes above the issue price of Rs 326. In the case of LG, there is euphoria and the premium had touched as high as Rs 425 and is currently around Rs 370. It is widely believed that the share would open strong with gains of Rs 300 or thereabouts.

Currently the issues from Rubicon Research Limited, Canara Robeco Asset Management Co Ltd and Canara HSBC Life Insurance Company Limited are open. The issue from Midwest Limited would open on Wednesday the 15th of October and close on Friday the 17th of October.

Diwali Muhurat trading will take place on Tuesday the 21st of October for one hour. Wednesday would be a trading holiday.

The week ahead would be volatile and choppy. The relationship between PM Modi and Donald Trump seems to be getting back on track after Trump realised that the Nobel Peace Prize was never going to be his. He has now gone after China. Will the trade talks with India conclude right away? Seems unlikely. One should hope that before 2025 ends, we are able to conclude them. Expect some turns and twists before they conclude as the man at the top is confused big time.

Levels of 25,300 have held their ground. They look like again acting as resistance as markets look to find support all over again at lower levels of say 24,800-850. With each attempt at crossing 25,200-300 failing, the level would become tougher to cross. Results season has begun and even though BSEIT was the top sectorial gainer last week, the only IT result declared was that from TCS and it left a lot to be desired. The share has since the beginning of the calendar year lost about Rs 1,060 to close at Rs 3,028. Not a very happy state to be in. Results would be the key and they don’t seem to augur well. Current geo-political scenario seems confusing and stressful. This is even though there seems to be some sort of peace emerging on the GAZA front. In such a scenario it makes sense to lie low and allow markets to run their course.

Trade cautiously.  

Arun Kejriwal (Market Veteran Investor & Opinion Maker)