The week gone by had a mid-week holiday on Wednesday followed by Thursday’s futures monthly expiry for August series which led to markets being volatile and on tenterhooks. As expected they ended the week with losses and lost on three of the four trading sessions and gained on one session. BSESENSEX lost 1,497.20 points or 1.84% to close at 79,809.65 points while NIFTY lost 443.25 points or 1.78% to close at 24,426.85 points. BANK NIFTY lost 1,483.75 points or 2.69% to close at 53,665.65 points. BSEMIDCAP lost 2.72% while BSESMALLCAP was down 2.93%. All in all, it was a bad four days at the markets and they were down across the board. The mood is depressing and in the coming week while there could always be a technical bounce because we are oversold, the news flow is missing.

The Indian Rupee lost 68 paisa or 0.78% to close at Rs 88.19 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It lost 87.26 points or 0.19% to close at 45,544.48 points. Trump continues to remain piqued about the fact that India did not support or nominate him for the Nobel Peace prize for a war in which he did not mediate. The tariffs that he has imposed on India are due to this fact and he being cheated off the award by India not supporting. Now even the Supreme Court in the USA has upheld the lower courts order on declaring these tariffs as wrong. While they have not been struck down, Trump has to do something out of the ordinary to salvage a lot of prestige, as every act of his is being questioned. The people who voted for him will get what they deserve for sure but ‘MAGA’ (make America great again) his pet theme has taken a big beating. One other thing that common citizens are realizing is that tariffs are to be paid by them.

There were four listings last week and all of them happened on Tuesday the 26th of August. While they all managed to close in the green on listing day, one of them slipped into the red over the remaining two days of the week, while the remaining three pruned their gains substantially. Vikram Solar gained Rs 4.45 or 1.34% to close at Rs 336.45, Shreeji Shipping Global gained Rs 0.45 or 0.18% to close at Rs 252.45, and Patel Retail gained Rs 7.05 or 2.76% to close at Rs 262.05 while Gem Aromatics lost Rs 48.90 or 15.05% to close at Rs 276.10. Very clearly there is fatigue in the primary markets with investors not making money by and large. To add to their woes is the fact that even the secondary market is not doing well and corporate India results for QI left a lot to be desired.

August futures expired on a weak note with the series losing 267.45 points or 1.08% to close at 24,500.90 points. Readers would recall that the week had begun with the series up at 101.75 points or 0.41%. Bears have clawed their way back into the series and won it quite decisively.

In economic news, GDP for the first quarter has come in a positive manner at 7.8%. While there are some adjustments which have to be factored in, it still remains impressive.

Coming to the markets in the week ahead, there is a possibility that on technical factors we could bounce to around 24,800 points at best. On the downside we have strong support between 24,200-24,250 points. If this were to break we could go down all the way to 23,600-23,700 points. These are important levels on both support and resistance side and not levels for the week. They could take longer than just a week to happen. Further, with fast developing changes on the global front, it’s a fluid state with just too many moving parts. The SCO meet in China could see important announcements happening and strong reactions coming in from the US. Ukraine and Russia war is just going on for too long and it’s high time that the two countries met face to face to resolve this never ending war.

The strategy for the week would be to continue with intra-day trading and refrain from large overnight positions. The week ahead could also see the GST council announcing changes in the categories which are moved out from the 12% and 28% and where they would now be placed. Also the new rates applicable for ‘Sin’ category products. Therefore makes sense to refrain from large overnight positions.

Trade cautiously.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)