The market continued to gain ground and the BSE Sensex inched closer to registering an all-time high before the global correction on the back of US strikes on Syria halted the market in its tracks.
Friday was a day of correction but not enough for the indices to end in the red. The Sensex gained 86.11 points and closed at 29,706.61 points, while the Nifty gained 24.55 points to close at 9,198.30. The rupee continued its winning streak and closed at Rs 64.28, up 57 paisa for the week.
Dow Jones closed flat and was down by only 7.06 points at 20,656.16 points.
The RBI kept key interest rates unchanged on expected lines. To suck out the excess liquidity in the system post-demonetisation, the central bank increased the reverse repo rate to 6 per cent from 5.75 per cent earlier.
The repo rate remained unchanged at 6.25 per cent. This move will keep the differential rate of interest between India and the US unchanged and prevent any outflow of funds from the debt markets.
Bickering among the so-called former promoters of Infosys, the most high profile IT company, seem unending. One wonders whether such a set of well-known people just do not want to let go of control. There is a management team, which reports to an illustrious board of directors, in the company. Why should a set of shareholders air their grievances publicly through the media? There are regulators to report issues and take up matters. This public bickering affects the company, its share price and therefore other shareholders. This is not good for the morale of people working in the company, too. Are there genuine issues affecting the company, or is it mere bickering on losing control? Only time can tell.
Shares of Shankara Building Products listed on Wednesday, April 5, and were an instantaneous success. The shares, which were issued at Rs 460, closed the day at Rs 632.80, a gain of Rs 172.80. The shares gained further ground in the remaining days of the week and closed at Rs 685.10. This performance was in sharp contrast to the earlier issue of CL Educate, which continued to be under pressure and closed the week with losses of 6.30 per cent and cumulative losses of over 23 per cent. Pricing of an issue is the key and investors are smart enough to see where value exists.
Liquidity is a key factor in our markets now and FIIs and domestic institutions are both flush with funds. While there is a lot happening on the legislative business, with almost all roadblocks to GST cleared, it appears that results have to keep pace with rising valuations.
The result season kicks off this week and Infosys would declare its results on Thursday. Friday is a holiday for the market and there would be a long weekend, forcing people to reduce exposure on Thursday.
The market is volatile and that left out feeling, a typical characteristic when market tops, is creeping in. More and more people are feeling that they have missed the bus and want to enter markets now.
This is further strengthened by the fact that midcap and smallcap indices are outperforming the Sensex and the Nifty and there is more action in smaller stocks. Last week, for instance, the BSE midcap gained 0.97 per cent and its smallcap was up 1.72 per cent.
One needs to be cautious at these levels and shuffle the portfolio where the riskier stocks with lesser fundamentals need to be sold and stocks with better fundamentals and from the larger cap stocks be bought.
This will ensure easier exit if something goes wrong. We are around the top currently and it becomes difficult to predict at the start of the week when the correction would actually happen.
Trade cautiously and keep your positions light towards the latter half of the week.
(The author is founder,
Kejriwal Research &
Investment Services)
