Global data to drive mkts; choppy and volatile trading likely
Very clearly the bulls have the upper edge and whatever happens in the US as far as interest rates are concerned, they will take the series quite comfortably
Markets in the period July 21st -27th gained on the first two days, lost on the next two and were up sharply on the last day of the period. BSE Sensex gained 418.79 points or 0.75 per cent to close at 55,816.32 points while Nifty gained 120.95 points or 0.73 per cent to close at 16,641.80 points.
Dow Jones was volatile and gained on three of the five trading sessions, but closed marginally in the negative. Dow Jones lost 63.17 points or 0.20 per cent to close at 31,761.54 points. Late on Wednesday night the US Fed would decide on increasing the interest rates. As per the minutes of the last meeting, they would be in the region of 75 basis points. While Dow Jones lost ground on Tuesday, futures are up on Wednesday. Not sure what the Fed has in store for the markets. It may be mentioned that the ECB has raised interest rates by 50 basis points and this has happened for the first time since 2011.
Bids were received for 1.45 lakh crores from four telecom providers who have bid for various bands in the spectrum auction at the end of day one. This has exceeded the target that the government was expecting from the auction of spectrum.
RBI has advanced its monetary policy meeting and will be meeting next week between 3rd-5th August. Expect interest rates to be raised and the idea of advancing the meet was to counter what the FED did this week on Wednesday night.
Zomato shares completed the first year and the lock in of investors who were shareholders prior to the share listing was lifted. The share saw huge volumes and fell sharply. Over the last three days, Zomato has seen traded volumes of 23.24 crore shares, 41.23 crore shares and 41.12 crore shares. Against this trading the delivery volumes were at 8.20 crore shares, 15.85 crore shares and 13.58 crore shares.
The share which had closed last week at Rs53.35 closed on Wednesday at Rs43.95, a weekly loss of Rs9.40 or 17.61 per cent. Incidentally the share which was issued at Rs76, had made a lifetime high of Rs169 and low of Rs40.60 on Wednesday. Very clearly the honeymoon for companies from the tech platform which have no profits or road to profitability is over. To add to its concerns was the acquisition of Blinkit which was not liked by the markets.
The period ahead 28th July to 3rdAugust begins with July futures expiring on Thursday. The present value of Nifty at 16,641 points is 861 points or 5.45 per cent higher than the month opening. Very clearly the bulls have the upper edge and whatever happens in the US as far as interest rates are concerned tonight, they will take the series quite comfortably.
Markets have very comfortably crossed the first hurdle of the 13th June gap and built upon it as well. While the results season is a mixed bag, there is hope that the next quarter would see margins improving as commodity prices come under control. The fact that the Russia-Ukraine crisis is over five months old has ceased to be news in any part of the world and life seems to be normal for the whole world.
The strategy for the period ahead would be to play with the trend which is not clear as yet. Sell on rallies and buy on sharp dips, and of paramount importance is to avoid having large overnight exposures. Levels of 17,100-17,200 on Nifty and 57,100-57,300 points on BSE Sensex are targets to be looked for in the coming days. Immediate support is at 16,000-16,100 and at 53,800-54,000 points. Markets will be choppy and volatile. Today's opening will be crucial as it would be a gapped opening. Upside or downside trend is a not sure case. Keep fingers crossed and hope the US Fed does not surprise.
(The author is the founder of Kejriwal Research and Investment Services, an advisory firm)
