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Correction and consolidation ahead, trade cautiously

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Correction and consolidation ahead, trade cautiously

New Delhi, April 14 (IANS) The week gone by had four trading sessions in which markets gained on two and lost on two. At the end of it all, benchmark indices ended virtually flat but gave loud indications that all is not well.

As one reads the news, Iran has attacked Israel with suicide drones and missiles and also declared that as far as they are concerned this was in retaliation to the attack on their embassy, and it’s all over. While the UN Security Council has called for an emergency session which will be held late in the night, the outcome would be known only when one reads the newspapers tomorrow or the Internet.

BSESENSEX lost 3.32 points or 0.00 per cent to close at 74,244.90 points while NIFTY lost 5.70 points or 0.03 per cent to close at 22,519.40 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.22 per cent, 0.12 per cent and 0.15 per cent. BSEMIDCAP gained 0.19 per cent while BSESMALLCAP lost 0.35 per cent.

What is significant is the fact that new highs were made on the first two days of the week. The high on BSESENSEX was 75,124.28 points while it was at 22,775.70 points on NIFTY. Looking at the developments, which will be discussed later, for the immediate week, these highs look too far away and unlikely to be crossed in a jiffy.

The Indian Rupee lost 11 paise or 0.13 per cent to close at Rs 83.41 to the US Dollar. Dow Jones too had a torrid week and lost on four of the five trading sessions and was flat on one. Suffice to say that at the present moment, the high of 39,887 points made on March 21 looks like a distant dream.

Rate cuts, an expectation which was driving markets, have been dashed to the ground. This has happened because the economy is in fine fettle and inflation which has been a key concern, is refusing to moderate. In such a scenario, rate cuts in the immediate short term should be ruled out.

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Our markets began their upward journey with expectation of results for the five state assemblies which were to be declared in the first week of December 2023. The benchmark indices on Friday, November 24, 2023, were at 65,970.04 points on the BSESENSEX and 19,794.70 points on NIFTY.

At the end of the next week on December 1, they had moved to 67,481.19 points and 20,267.90 points. Exit polls were announced post-market closing on Friday, December 1, and results were declared on Sunday, December 3. In the week ended Friday, December 8, markets had moved to 69,825.60 points and 20,969.40 points respectively.

Gains in the two-week period were 3,855.56 points or 5.84 per cent in BSESENSEX and at 1,174.70 points or 5.93 per cent on NIFTY. Since then we have moved up much further, discounting the outcome of the general elections and gaining another 6.3 per cent on the BSESENSEX and 7.39 per cent on NIFTY.

Call it by any name, markets need a correction as there is virtually no space for further upside right away.

Shares of Bharti Hexacom Limited who had issued shares at Rs 570, were listed on Friday, April 12. Shares ended day one with a fantastic appreciation and closed at Rs 813.75, a gain of Rs 243.75 or 42.76 per cent. The issue was an OFS of 15 per cent of the equity capital which was offered by the Government of India. The remaining 15 per cent of the equity or 7.5 crore shares are locked in for six months from the date of listing. One could be sure that looking at the share performance, the government would look to sell these shares when the opportunity arose.

In what could be termed as sheer coincidence, Vodafone Idea Limited, yet another telecom player is tapping the capital markets with its follow-on offer for Rs 18,000 crore in a price band of Rs 10-11. The issue would open on Thursday, April 18, and close on Monday, April 22.

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The share price on BSE closed at Rs 12.96. The top end of the band offers an arbitrage of Rs 1.96 or 17.8 per cent while at the lower end of the band, the arbitrage is Rs 2.96 or an attractive 29.6 per cent.

The company has allotted shares worth Rs 1,200 crore to a vendor, ATC, a tower company towards pending dues at Rs 10. This was done about three weeks ago and I strongly believe this should be the price at which the company would allot shares to all applicants.

The present shareholding of the company is 32.3 per cent for the Vodafone group, 18.1 per cent for the Aditya Birla group and 33.1 per cent for the Government of India, while the public shareholders hold 16.5 per cent.

This issue would keep the markets engrossed and there would be various arbitrage opportunities available. While the share is traded in futures and options, it is currently in the banned stage as overall exposure has crossed the limits of the exchange for the scrip.

The Mauritius double tax treaty has seen a change being introduced where the PPT (principal purpose test) has been made a key for the purpose of lower tax being applicable or not.

The ramifications of this treaty are yet to be known, but on the very first day itself, there was large selling by FPIs who sold shares worth Rs 8,000 crore on a net basis. Details of the policy have begun to trickle in on Friday.

The current global scenario, US FED and expectations of interest rates being cut being dashed, geo-political news being disturbed with first Ukraine-Russia, then Israel and Gaza and now Israel and Iran with the Houthis thrown in as a bonus, is keeping the pot boiling.

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Crude is once again threatening to move towards the three-digit mark with gold having made a new high. All of this points to uncertain times and the fact that global markets cannot make new highs in such times. We need stability and a period of consolidation.

TCS has declared results for the 4th quarter and year ended March 24. There is improvement and order flows have certainly improved.

Looking at the large size of TCS, one cannot take this as indicative of the entire IT space and one certainly needs to know how the mid-tier and small IT companies would fare. One would have to wait for results from some more companies before coming to a decision.

Coming to the markets, expect them to remain volatile and under pressure. As of the time of writing this article, all indications are towards a gap-down opening on Monday.

One will have to burn the midnight oil or have an early rise tomorrow to see the outcome of the UN Security Council special session outcome. Irrespective of anything, there is an escalation of tension and this leads to uncertainty. Uncertainty is bad for markets.

The strategy for the week ahead, which has four trading sessions with a festival holiday on Wednesday, is to sell on sharp rallies and buy only on sharp dips. The focus should be on large-cap and select mid-cap stocks.

As markets are overdue for correction and consolidation, allow markets to find their own levels. There is no need to push the pedal in buying. Trading and buying opportunities would be available.

In terms of resistance, the highs made on Tuesday at 75,124 and 22,775 points acted as strong resistance. Similarly, the previous lows made at 21,900 points and around 72,000 points would act as strong supports.

Trade cautiously.

(Arun Kejriwal is the founder of Kejriwal Research and Investment Services. The views expressed are personal)

–IANS

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FPIs infuse Rs 44,344 crore in stock markets this month ahead of Union Budget

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FPIs infuse Rs 44,344 crore in stock markets this month ahead of
 Union Budget

FPIs infuse Rs 44,344 crore in stock markets this month ahead of
 Union Budget

Mumbai, July 20 (IANS) Foreign portfolio investors (FPI) continued the investment momentum in the stock markets in India, infusing around Rs 44,344 crore in equity and debt this month (till July 19).

Market analysts said that FPIs were consistent buyers with buying picking up during the week ended July 19.

FPIs have invested worth Rs 30,771 crore in equity and Rs 13,573 crore in debt.

They were buyers in autos, capital goods, healthcare, IT, telecom and oil and gas.

“A notable trend was the lack of buying in financial services, which partly explains the poor performance of financial services in July so far,” said V. K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

If the recent trend of weakness in dollar and bond yields persist, FPIs are likely to continue their buying in the market.

According to experts, domestic and foreign investors are keenly watching for possible tweaks in the long-term capital gains tax in the Union Budget 2024-2025, to be presented on July 23.

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There was a total net inflow of Rs 2,82,338 crore for both equity and debt in FY24.

According to market analysts, the FPI community will play a major role in positioning India as the third-largest economy in the world.

The reason for a quick rebound in the capital markets can be attributed to the positive sentiments and a stable government’s assurance of continuity of reforms.

All eyes are now on the budget proposals which will hopefully announce path-breaking reforms, providing India a golden opportunity against the other emerging global markets.

–IANS

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African Union approves AI strategy, digital compact to boost Africa's advancement

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African Union approves AI strategy, digital compact to boost Africa's advancement

African Union approves AI strategy, digital compact to boost Africa's advancement

Accra, July 20 (IANS) The executive council of the African Union (AU) has approved its Continental Artificial Intelligence (AI) Strategy and African Digital Compact to boost Africa’s digital development, an official said.

AU Commissioner for Infrastructure, Energy and Digitization Amani Abou-Zeid said this in an interview Friday during the 45th Ordinary Session of the AU Executive Council, a prelude to its 6th Mid-Year Coordination Meeting, in the Ghanaian capital of Accra, reported Xinhua news agency.

“Our council approved the AU strategy for artificial intelligence and the strategy for using digital technologies, which will set the path for Africa’s use of digital technologies for development,” Abou-Zeid said.

These strategies would provide direction on the use of technology to find solutions to Africa’s challenges, help fast-track many projects and programmes, and guard against the unethical use of technology, she said.

“The technology must help us preserve our identity, preserve our languages and cultures, and be helpful rather than harm us,” the commissioner said.

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The strategies would create an enabling environment for the development and use of digital technology, Abou-Zeid said, adding that the AU policy would guide the governments of various members to develop the necessary policy and regulatory frameworks for the sector.

“The strategies will help us create a single digital market and guide all sovereign countries on how to use digital technology to boost their development processes,” she said.

“There must be rules and regulations to punish the negative use of AI and digital technologies to prevent further abuse,” Abou-Zeid said, adding that seven African countries now have AI policies, but the continental body would like to see all members develop their policies.

–IANS

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Textile centre will be set up in Jabalpur: MP CM

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Textile centre will be set up in Jabalpur: MP CM

Textile centre will be set up in Jabalpur: MP CM

Bhopal, July 20 (IANS) Madhya Pradesh Chief Minister Mohan Yadav said on Saturday that the modern textile centre would be set up in Jabalpur which will provide jobs for women.

“A mega unit of the modern textile centre will be set up in Jabalpur soon. This development will not only make Jabalpur a new textile hub in the state but would also provide employment to the women,” the Chief Minister said while addressing the inaugural session of the Regional Industrial Conclave in Jabalpur.

Several business houses and industrialists from across the country also participated in the conclave.

The Chief Minister said that many medical and other educational colleges have been constructed in the past few years in Madhya Pradesh.

“We have more than 275 units in the pharma sector and products are being exported in more than 160 countries,” the Chief Minister said.

He added that there are as many as 16 industrial parks and 517 MSME units in Mahakoshal (Jabalpur) which is providing employment to about 20,000 people.

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–IANS

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India's rich history, vibrant culture highlighted at Korea international fair

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India's rich history, vibrant culture highlighted at Korea international fair

India's rich history, vibrant culture highlighted at Korea international fair

Ilsan, July 20 (IANS) India’s rich history and vibrant culture grabbed the spotlight as the ninth Korea International Tourism Fair kicked off at Ilsan in northwest of Seoul.

The Embassy of India in Seoul and the UP government are jointly participating in the fair held at the Korean International Exhibition Centre.

India’s Ambassador to the country, Amit Kumar, joined the opening ceremony alongside Chang-su Jeong (Chairman of the Organisation Committee), Dong Hwan Lee (Mayor of Goyang Special City), Oh Who Seock (Vice Governor of Gyeonggi Province) and Min-hyeon Kyeong (President of Kangwon Domin Ilbo & the Korea Local Newspapers Association).

The UP Tourism booth was jointly inaugurated by all the dignitaries as the Indian Ambassador spoke of India’s rich history and vibrant culture.

In his remarks, he also highlighted India’s natural beauty and wildlife, along with the country’s incredible diversity of languages, cuisines, clothing, architecture and faiths.

“It is often said that whatever a tourist is looking for, can be found in India,” said Kumar.

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The visitors to the fair were also given deep insights into Uttar Pradesh by the state tourism body.

“The state represents the microcosm of the rich heritage that India has to offer. There are 42 UNESCO World Heritage Sites in India, including six in Uttar Pradesh. The state also has a rich heritage of Buddhism, comprising six cities where Lord Buddha once lived and preached,” said Ambassador Kumar.

Korea International Tourism Fair is a tourism exhibition aimed at fostering the growth of the tourism industry by expanding the market through collaboration between domestic and international tourism. It also seeks to boost local tourism by promoting the internationalisation of domestic cities.

Several countries from around the world participated in the event.

–IANS

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Yes Bank clocks 47 per cent jump in q1 net profit at Rs 502 crore

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Yes Bank clocks 47 per cent jump in q1 net profit at Rs 502 crore

Yes Bank clocks 47 per cent jump in q1 net profit at Rs 502 crore

New Delhi, July 20 (IANS) Private sector lender Yes Bank on Saturday reported a standalone net profit of Rs 502 crore for the April-June quarter of 2024-25 which represents a 47 per cent jump over the corresponding figure of Rs 342.5 crore for the same period of the previous year.

The interest earned by the bank during the quarter rose 19.8 per cent to Rs 7,719 crore from Rs 6,443 crore in the same period last year.

The asset quality of the bank also improved during the first quarter with the gross non-performing assets (NPA) of the bank coming down to 1.7 per cent of total loans as of June 30, as compared to 2 per cent in the year-ago period.

Similarly, the quarterly net NPA ratio declined to 0.5 per cent as of June 30, compared to 0.6 per cent sequentially, and 1 per cent year-on-year.

–IANS

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