The week gone by saw markets gain as geo-political tensions eased into the weekend. Would this continue as we enter into the working week, is a million dollar question. Markets in India gained on two of the four trading sessions. BSESENSEX gained 943.29 points or 1.22% while NIFTY gained 302.95 points or 1.26% to close at 24,353.55 points. BANKNIFTY gained 652.95 points or 1.17% to close at 56,565.70 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.71%, 1.97% and 2.33% respectively. BSEMIDCAP gained 2.23% while BSESMALLCAP gained 3.41%. After a long time one saw no ‘Friday effect’ on markets where we typically see selling in the second half of Friday’s trade with positions being unwound. This time around, one saw markets rising and shorts being covered as geo-political news indicated that second round of talks would likely happen when trading for the coming week begins. Unfortunately, events during the weekend have been different and a great feeling has left people more confused than ever before.

The Indian Rupee lost 19 paisa or 0.21% to close at Rs 92.67 to the US Dollar. Dow Jones gained on four of the five trading sessions. It was up 1,530.86 points or 3.19% to close at 49,447.43 points.

There was one mainboard IPO which listed on Friday the 18th of April. Shares of Om Power Transmission Limited which had issued shares at Rs 175 saw shares gain and close at Rs 190.15 on BSE. Shares were up Rs 15.15 or 8.66%.

The Invit from Citius Transnet Investment Trust Limited has opened for subscription on Friday the 17th of April and would close on 21st of April. The price band is Rs 99-100. The issue is for 11.05 crore shares and the issue size is Rs 1,105 crores. The company manages 10 project SPV’s and has 11 projects identified and available under ‘ROFO’ with it. The combined 21 projects which would be a combination of toll and annuity projects would ensure a steady inflow into the company. At the end of the 1st day, the issue is 70% subscribed. The issue is being brought by EAAA as the promoters.

Coming to the geo-political situation which is fast evolving. The contentious Strait of Hormuz which was opened to all by Iran, has seen a blockade by United States and there is a flip-flop on this causing utter confusion. Qatar an ally of the United States has said that there would be no more attacks on Iran from their soil. The European Union is debating whether they should depend on USA as an ally in NATO. For all practical purposes one should assume that USA is out of NATO.

One last critical point which is going to lead the next round of contention in Iran-USA war is the handover of enriched uranium. USA is insisting that Iran hand it over to them. The quantity includes 441 kg of enriched uranium which is close to 90%, suitable for weapon grade and 5% enriched 9,000 kg. Against this handover, USA may consider releasing 20 Billion of Iran’s payments frozen in various accounts globally.

Coming to what would happen next week, the next round of war is likely to happen as it is becoming increasingly apparent that USA doesn’t want peace. This would lead to oil spiking, global markets crashing and further uncertainty. Already impact of war has affected economic activity across the world with slowdown, increased and high inflation setting in and causing widespread disruption. An interesting observation is that there are protests in Israel and USA, but none in Iran. Wonder who speaks the truth.

Our markets would be under pressure next week. The rally makes immediate resistance at 24,600-24,700 points on NIFTY. Only if this is taken out and sustained should we think of going long or we could get rapped hard on the knuckles. On the downside strong support exists at 23,800-23,900 points. If this were to break, support exists lower down at 23,400-23,450 points.

Tough week ahead and one will have to get used to digital media and learn to follow and interpret tweets and social media.

Trade cautiously.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)