Q3 earnings to set the tone for mkts

The period (Dec 28-Jan 3) under review began with December futures expiring on a positive note. The series fared very well for the bulls and gained 1,645.55 points or 8.17 per cent to close at 21,778.70 points

Week Ahead

• Markets likely to be under some pressure
• Key indices rose 8% in Dec
• Market mood is bullish
• Volumes are lower than normal

The period December 28-January 3 under review saw markets gain on expiry day and then correct itself. The gains made on expiry day were not enough to keep the momentum going. Markets gained on two of the five sessions and lost on three. BSE Sensex lost 681.83 points or 0.95 per cent to close at 71,356.60 points, while Nifty lost 137.40 points or 0.63 per cent to close at 21,517.35 points. The momentum that markets witnessed in the last week of December was clearly unexpected and saw the bulls pressing the pedal to suit their cause. The ensuing correction is more of a reason to get back to reality.

Dow Jones gained on three of the four sessions and gained 169.71 points or 0.45 per cent to close at 37,715.04 points.

The period under review began with December futures expiring on a positive note. The series fared very well for the bulls and gained 1,645.55 points or 8.17 per cent to close at 21,778.70 points.

The year 2023 has ended under the period under review. On a yearly basis, BSE Sensex gained 11,399.52 points or 18.74 per cent to close at 72,240.26 points. Similarly, Nifty gained 3,626.10 points or 20.03 per cent to close at 21,731.40 points. The rally in BSE Sensex was 18.74 per cent for the year, of which 26.62 per cent was in the first 10 months and the balance 73.38 per cent in the remaining two months. In the case of Nifty, the rally was 20.03 per cent for the year of which the rally in the first 10 months was 26.85 per cent, while it was 73.15 per cent in the remaining two months. For the records, Dow rallied 4,484.59 points or 13.53 per cent to close at 37,631.87 points. The period under review saw two listings happen. The first to list was Azad Engineering Ltd, which had issued shares at Rs524. The share listed on Thursday (December 28). The discovered price was Rs710, a gain of Rs186 or 35.49 per cent. Share closed day one at Rs677.10, a gain of Rs153.10 or 29.21 per cent. Share closed the week lower at Rs666.80, a gain of Rs142.80 or 27.25 per cent .

The second share to list was Innova Cap Tab Ltd, which had issued shares at Rs448. The share listed on Friday (December 29), the last trading day of calendar year 2023. The discovered price was Rs456.10, a gain of Rs8.10 or 1.80 per cent. Share closed day one at Rs545.15, a gain of Rs97.15 or of 21.68 per cent. By the end of the period, the share lost ground to close at Rs549.85, a gain of Rs101.85 or 22.73 per cent .

The Supreme Court has given a clean chit to Adani in the Hindenburg case, and said there were no grounds to transfer the probe to a SIT (Special investigation team). The court also gave Sebi, three months in which to complete the investigation in the pending 2 out of 24 cases. Shares of Adani Group were volatile during the day, but closed with gains.

The period January 4-10 will continue to be volatile and choppy. Markets are likely to be under some pressure as they try to digest the almost eight per cent of gains made in December. The market mood is bullish, but momentum seems to have been broken at least momentarily. Further, volumes in the market place are on the lower-than-normal levels currently. Hopefully in the coming week or two, things will be back to normal and markets are likely to move up, but at a much slower pace than what we have seen.

The strategy would be to focus on stocks, which are likely to announce results as these would witness two sided movements and based on the results from the front-line stocks one could then pick stocks from the pack or the sector. This is because when a sector does well almost all the stocks follow suit. It’s better to stay with the large-cap stocks during the results season. Trade cautiously.