Stock-Specific Trading More Likely As Fears Escalate On Indo-Pak war

Key resistance levels are at 24,500 on Nifty and 80,700 on Sensex. On support side, key supports for the markets are the lows made on April 25 at 78,605.81 points and 23,547.85 points. Next levels would be at 77,000-77800 on BSE Sensex and 23,000-23,300 on Nifty

The April 24-30 period saw markets move sharply in both directions. However, at the end of the period, net movement indicates that nothing happened in the market as net change was hardly worth talking about. Markets gained on two of the four trading sessions and lost on two. The last session (Wednesday) it could not make up its mind how it wanted to end. It finally ended flat with little change. However, the last half hour of trading showed that markets were under pressure.

The BSE Sensex gained 125.75 points or 0.16 per cent to close to at 80,242.24 points, while NSE Nifty gained 5.25points or 0.02 per cent to close at 24,334.20 points. Dow Jones gained on all five trading sessions and was up 1,340.64 points or 3.42 per cent to close at 40,527.62 points. The period under review began with April futures expiry. The expiry was on a quiet note. After all the action through April, expiry was a low-key affair and Nifty lost 86 points on expiry day. April seriessaw Nifty futures gain 650.75 points or 2.76 per cent to close at 24,242.70 points.

Last Friday saw markets opening sharply down on expectations of retaliatory strikes on Pakistan forthe Pahalgam incident. The Prime Minister has given a carte blanche to the armed forces to preparea reply as they deem fit. When, where and what magnitude is something which only the armed forces know. Screws are being tightened at many levels and having their effect as well. All visas have been cancelled, diplomatic personnel have been downsized, trade with Pakistan is banned directly and also via transhipment and so on. Indus water treaty has been kept under abeyance. The fall onFriday was more than made up over the next two days and markets are actually trading higher. Markets believe that any retaliation would be well planned and not a knee jerk reaction.

Ather had tapped the capital markets with its fresh issue and offer for sale issue which had opened on Monday (April 28) and closed on Wednesday (April 30), managed to get subscribed. The overall subscription was 1.49 times with QIB portion subscribed 1.76 times, while HNI portion was subscribed 0.69 times and Retail subscription was 1.84 times. The fresh issue is for Rs2,626 crore and the offer for sale consists of 1,10,51,746 equity shares in a price band of Rs304-321.

FPIs, who have been sellers of Indian equity from October 24 to February 25, saw FPIs buy towardsthe end of March and turn buyers in April after selling for the first 10-11 days. They are as we speaknet buyers in April with reporting for one day. It appears India is becoming a safe haven for themever since global markets particularly USA have started reacting since trade tariff wars have begun.

Reliance Industries reported a decent set of numbers and it helped the share recover over the lastcouple of days which has given the bulk of the gains in the benchmark indices. The levels in the market to watch out for as resistance would be levels of 24,500 on Nifty and at 80,700 on BSE Sensex. On the support side, key supports for the markets are the lows made on Friday (April25) at levels of 78,605.81 points and 23,547.85 points. If these are breached, next levels would beat 77,000-77800 on BSE Sensex and 23,000-23,300 on Nifty.The period ahead begins with a holiday on Thursday (May 1). The strategy for the period would be to look at markets in the new week as the weekend will happen after just one trading session. If you decide to trade it would be preferred to be an intraday trade. Results season is on full swing and there are pockets of strength being witnessed in various sectors particularly BFSI. This seems a good area to place your bets. Housing finance companies have also declared good results. Trade cautiously.

(The author is the founder of Kejriwal Research and Investment Services, an advisory firm)