Markets hovering in unclear direction
Levels of 18,200 on Nifty and 61,150 on BSE Sensex are key levels for markets to cross and sustain before any serious upward move can begin
image for illustrative purpose
The period December 22- 28 under review was super volatile and shook the markets to its core. It began with a fall on the first day and then on Friday, because of Covid fears in China our markets fell very sharply. BSE Sensex was down just about 1,000 points. This was in sharp contrast to the rest of the world where there was no such impact. Monday and Tuesday saw markets reverse very sharply and recover all the losses. Wednesday was no man's land with markets oscillating between negative and positive. They finally closed with minor losses. With two days of gains and three days of losses, BSE Sensex closed with losses of 156.96 points or 0.26 per cent to close at 60,910.28 points, while Nifty closed at 18,122.50 points a loss of 76.60 points or 0.42 per cent.
Dow Jones gained on four of the five trading sessions during the period under review. It was up 391.82 points or 1.19 per cent to close at 33,241.56 points. With three trading sessions for the year 2022 to end, Dow is down 8.52 per cent for the year on a year-to-date basis, while Nasdaq is down 33 per cent. In comparison, we are better off in India with BSE Sensex up about 5.4 per cent and Nifty up 5.37 per cent.
In primary market news, there were three listings and one issue that opened and closed for subscription. Yet another issue had its last day of subscription on Thursday (December 22). The issue from ELIN Electronics Ltd had tapped the capital markets with its fresh issue for Rs175 crore and an offer for sale of Rs300 crore. The issue had opened on Tuesday (December 20) and closed on Thursday..The price band of the issue was Rs234-247. The issue was overall subscribed 4.76 times with QIB portion subscribed 3.47 times, HNI portion subscribed 2.31 times and Retail portion subscribed 3.26 times. There were 2.39 lakh applications.
The second issue was from Radiant Cash Management Services Limited which had opened on Friday (December 23) and closed on Tuesday (December 27). The issue was undersubscribed and as the same consisted of a large offer for sale, was deemed closed as the company reduced the size of offer. The issue was subscribed 0.53 times overall with QIB portion subscribed 1.01 times, HNI portion subscribed 0.66 times and Retail portion subscribed 0.21 times. There were 34,000 applications.
Of the three new listings, the first to list was Sula Vineyards Limited which had issued shares at Rs357. The discovered price at the BSE was Rs358 which was higher by Rs1. By end of day one listing day, the share had fallen to Rs331.15, a loss of Rs25.85 or 7.24 per cent. At the end of the period under review, the share was trading around similar levels at Rs329.85, a loss of Rs28.15 or 7.86 per cent.
The second share to list was Landmark Cars Limited which had issued shares at Rs506. The share debuted at Rs471.30, a loss of Rs34.70 or 6.85 per cent. By the end of the period under review, the share had slipped further to close at Rs 461.50, a loss of Rs 44.5or 8.79%.
The third share to list was Abans Holdings Limited which had issued shares at Rs 270. The share debuted at Rs 270 on BSE which was the issue price. At the end of the day the same closed at the lower circuit of Rs 216.05, a loss of Rs 43.95 or 19.98%. At the end of the period under review, the share slipped further to close at Rs 201, a loss of Rs 69 or 25.55%.
The period 29th December to 4th January would begin with December Futures expiring on Thursday. Currently the series has the bears in command with a lead of approximately 360 points, with a day to go. It seems almost impossible that this can be made up by the bears. The period under review would continue to be choppy and volatile. While the recovery has been swift and markets have recovered all of last period's losses, we are not yet out of the woods. The moment the year changes, people will look at expected earnings for the October -December quarter and in a fortnight, start talking about the Union Budget due on 1st February. Looking at the present scenario, it makes sense to stay light on commitments and refrain from large positions on any side. Let markets decide on a trend which currently seems unclear. Levels of 18,200 on Nifty and 61,150 on BSE Sensex are key levels for markets to cross and sustain before any serious upward move can begin.
Wishing all a happy and prosperous New Year 2023.
(The author is the founder of
Kejriwal Research and Investment Services, an advisory firm)
