The week gone by was full of Trump and his way of dominating center stage globally. He imposed the penalty tariff of doubling the existing 25% on India to 50% because we import crude from Russia. Incidentally Europe imports its energy needs from Russia while the USA imports chemicals and many other products but in value significantly larger amounts than India. Suffice to say, that logic has taken a back seat and currently it’s all about ‘bullying’ and seeing who stands up or buckles under. For the records, Switzerland has invited the wrath of Donald Trump by cancelling their order of F-35 and attracted huge tariff, at 39%, the highest amongst European nations. Spain too has cancelled the fighter aircraft order. India has an order of about 80 billion USD with Boeing for passenger aircraft. Our total exports to the US in fiscal 2024 were at 87.3 billion USD. If India decides to review orders of Boeing considering safety issues with the crash of Dreamliner, things could change dramatically. Let’s just leave tariff and Trump at that with a final comment that Trump and Putin are expected to meet in Alaska on the 15th of August over Ukraine.

Markets in India fell on three of the five sessions and gained on two. BSESENSEX lost 742.12 points or 0.92% to close at 79,857.79 points. NIFTY lost 202.05 points or 0.82% to close at 24,363.30 points while BANK NIFTY lost 612.70 points or 1.10% to close at 55,004.90 points. The broader markets saw BSE100, BSE200 and BSE500 lose 0.88%, 0.95% and 1.04% respectively. BSEMIDCAP was down 1.29% while BSESMALLCAP lost 1.86%. Markets are nervous and worried about the continuous supply of paper which is coming from IPOs, secondary paper sold by PE investors and promoters. FPIs have sold Rs 47,666 crores in July 25 and sold another Rs 14,000 crores in the first eight days of August.

The Indian Rupee lost 19 paisa or 0.22% to close at Rs 87.70 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It was up 587.03 points or 1.35% to close at 43,588.58 points. The entire world is focused on what tantrums, tariffs and statements Trump makes. If Ukraine-Russia issue does get settled over the weekend in Alaska, one should be rest assured that demands for Trump to be nominated for Nobel Peace Prize would begin all over again. I am sure no one will bother as long as he does work in the White House rather than put global economy at such risk as is currently happening.

Coming to our markets, this was the sixth consecutive week of losses. Sooner or later there would be a technical bounce, but that would be just that, a technical bounce. It could be for a day, a couple of days or could also be a weekly positive, to break the negative trend. I t would not indicate that things have turned around. New global normal are yet to be made and established. Very clearly, USA is turning out to be a fair weather friend only and it has no long-term relationships as is evident. With India playing its cards well and looking to strengthen ‘BRICS’ with the first four partners, Brazil, Russia, India and China, coming closer and willing to counter USA and its bullying tactics, new long term relationships are likely to emerge. In such a scenario, one needs to be patient with markets, absorb short term pain, and wait to build a portfolio all over again. Things are work in progress and many new scenarios would emerge. Who would have thought that ‘BRAMOS’ missile would become such a big super success and India would receive orders and enquiries from so many countries. Things are changing and we need to understand that when a nation rises in ranks, there is resentment at the top.

The primary markets are in full bloom and we have IPOs galore. Besides the issues from JSW Cement Limited and All Time Plastics Limited which have opened and would close today, i.e. 11th August, we have issues from Blue Stone Jewellery and Lifestyle Limited and Regaal Resources Limited which are opening during the week. While Bluestone opens on Monday the 11th of August and closes on Wednesday the 13th of August, Regaal would open on Tuesday the 12th of August and close on Thursday the 14th of August. There would be a few road shows happening as well, with their IPOs opening in the week of 18th of August.

Expect markets to trade in range bound fashion. Support exists at levels of 24,200 points where we are almost there. If this were to break we could see levels of 23,800-23,850 points. On the upside we could see levels of 24,800 or thereabouts. The week has an extended weekend with a holiday on Friday, the 15th August when we celebrate our 78th Independence Day. This would make markets nervous on Thursday, with what could happen in Alaska and also what PM Modi speaks from the ramparts of Red Fort on 15th August. Incidentally both events happen on Friday the 15th of August.

The strategy in such troubled times would be to lie low and allow markets to seek their own levels. Things are tough, but by being adventurous nothing much is likely to be achieved. Let some clarity emerge before taking any decisions.

Trade cautiously.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)