Further upward trajectory in sight
For Dec 8-14 period, the markets will try to catch up on the momentum, which seems to have slipped over the last few days
The period December 1-7 under review saw markets make new lifetime highs on an intraday and closing basis. The intraday highs were 63,583.07 points on BSE Sensex and 18,887.60 points on Nifty. The closing highs were 63,284.19 points and 18,812.50 points respectively. Markets thereafter were subdued and lost on the next three days. The last day saw markets unable to make up their mind. After remaining volatile and trading in both directions, they finally closed with losses. BSE Sensex ended the period, down 689.32 points or 1.10% to close at 62,410.68 points, while Nifty lost 197.85 points or 1.05% to close at 18,560.50 points.
Dow Jones saw the markets gain on two of the five trading sessions. There was a very sharp swing day on Wednesday in the US, when markets after being negative gained over 700 points on a net basis. The Fed Chairman Jerome Powell said at a meeting on Wednesday, "Time for easing rate increases is coming". This led to the sharp recovery and optimism that going forward in 2023, we may not see 75 basis point rate hikes. At the end of the period, Dow lost 256.19 points or 0.76% to close at 33,596.34 points.
There are two primary market issues slated in the week ahead. The first from Sula Vineyards Limited would be having its roadshow on Wednesday (December 7). The issue is entirely an offer for sale of 2.69 cr shares in a price band of Rs340 to 357. The issue would open on Monday (December 12) and close on Wednesday (December 14).
The second issue is from Landmark Cars Limited which is tapping the capital markets with its fresh issue of Rs150 cr and an offer for sale of Rs402 cr. The issue would open on Tuesday (December 13) and close on Thursday (December 15). The price band would be announced on Thursday. The roadshow would also be held tomorrow.
RBI announced its credit policy after the three-day meet which was held from Monday (December 5) to December 7. RBI has raised repo rates by 35 basis points to 6.25%. This comes after three consecutive rate hikes of 50 basis points each. This has come on the back of inflation easing but at the same time growth tapering. RBI has revised downwards GDP for FY23 to 6.8%.
Coming to the markets in the December 8-14 period, the markets will try to catch up on the momentum, which seems to have slipped over the last few days. There has been substantial increase in the number of mid-cap and Small-cap stocks which have participated in the rally. Expect this broadening of the market to continue and Nifty to cross 18,900 and move towards 19,000. Expect strong support around the 18,550-18,600 levels and 62,400-62,500 levels respectively.
It should be noted that when markets enter this kind of movement, they typically end nine times out of 10 with euphoria setting in. This euphoria would happen only in the mid-cap and Small-cap space. Be patient and await the right time to book profits in the mid and small-cap spaces which are yet to really participate in the rally.
(The author is the founder of Kejriwal Research and Investment Services, an advisory firm)
