Trade cautiously using mind and not emotions

The week that has passed had four trading sessions, but it seemed like the week did not just come to an end. We began with a sharp fall on Monday and then more than made up for it with smart rallies on both Tuesday and Wednesday. Thursday was a holiday, and Friday when markets reopened, all hell was let loose.

Markets just collapsed, and we ended the week with decent losses. BSESENSEX lost 949.74 points or 1.27 per cent to close at 73,583.22 points, while NIFTY lost 294.90 points or 1.28 per cent to close at 22,819.60 points. BANKNIFTY lost 1,152.45 points or 2.16 per cent to close at 52,274.60 points.

The broader markets saw BSE100, BSE200 AND BSE500 lose 1.40 per cent, 1.50 per cent and 1.46 per cent respectively. BSEMIDCAP lost 1.27 per cent while BSESMALLCAP lost 1.76 per cent. The top sectorial loser was BSEREALTY, down 3.95 per cent, while the top gainer was BSEIT, up 0.78 per cent.

Markets gained on two of the four trading sessions and lost on two. Lows of the week were made on Monday, the 23rd of March at 72,696.39 points on BSESENSEX and at 22,471.25 points on NIFTY.

The highs were made on Friday at 74,904.91 points and 23,186.10 points respectively. These levels would play an important part in acting as supports and resistances in the coming weeks.

The India Rupee continued to be under pressure and lost 95 paisa or 1.01 per cent to close at Rs94.73 to the US dollar. Dow Jones lost on three of the five trading sessions and gained on two. It was down 410.83 points or 0.90 per cent to close at 45,166.65 points.

I am no expert on war matters, but am compelled to offer my two-bit understanding on the Israel-US-led war on Iran; a couple of points to be taken care of. There is apparently no intention on any side to discuss and normalize relations.

This ten-day ceasefire is only a smokescreen created by the USA to move in ground troops and be better positioned for the next round. Israel is running low on ammunition, and it appears that they do not have enough to take them through the coming days when fighting on the ground begins.

Thirdly, Iran is better positioned to fight on the ground and would have an upper hand. Further, when body bags are carried by aircraft back to the USA, there would be a hue and cry raised by Americans, which could cause trouble for Trump.

One other point, while addressing his cabinet, Trump spoke about the ‘Strait of Trump’ instead of the Strait of Hormuz. It shows his current mindset and how arrogant and pompous he currently is.

Markets, when they open next week in India, will see March futures expire on Monday, the 30th of March, as Tuesday is a trading holiday. Further, Friday is again a trading holiday for Good Friday, which would see many global markets also shut.

In short, it would be just a three day week with a break in momentum, because of the Tuesday holiday. Coming to the primary markets, we saw three issues listed during the week and four IPOs closed for subscription. If one were to use one sentence to describe what happened, Not satisfactory. There is fatigue, and investors are not willing to put in new money at current valuations.

Coming to the listings first, the first to list was Innovision Limited, which had issued shares at Rs519. The share closed at the lower circuit of Rs372.80 on Monday. By Friday, the share lost further ground and closed at Rs357.50, a loss of Rs161.50 or 31.12 per cent.

The second share to list was the Invit from NHAI, Raaj Marg Infra Limited, which had issued units at Rs100. The Invit closed day one (Tuesday 24th March) at Rs106.83, a gain of Rs6.83 or 6.83 per cent. By the weekend, it gained further to close at Rs109.82, a gain of Rs9.82 or 9.82 per cent.

The third share to list was GSP Crop Science Limited, which had issued shares at Rs320. Shares closed day one (Tuesday 24th March) at Rs356.10, a gain of Rs36.10 or 11.28 per cent. By the weekend, it lost marginally to close at Rs355.25, a gain of Rs35.25 or 11.02 per cent.

The first of the four IPOs was from Coal India subsidiary, CMPDI, which closed on Tuesday, the 24th of March. The issue was subscribed 1.05 times total, with the QIB portion subscribed 3.48 times, the HNI portion subscribed 0.35 times, Retail portion was subscribed 0.33 times.

The remaining three issues all opened on Tuesday, the 24th of March, and closed on Friday, the 27th of March. The first was from Sai Parenterals Limited, which had issued shares in a price band of Rs372-392. The issue was subscribed 1.08times total, with the QIB portion subscribed 1.73 times, the HNI portion subscribed 2.45 times, Retail portion was subscribed 0.12 times.

The second issue was from Amir Chand Jagdish Kumar (Exports) Limited. The issue was subscribed 3.41times total, with the QIB portion subscribed 1.18 times, the HNI portion subscribed 13.41 times, Retail portion subscribed 1.44 times. The issue size was Rs440 crores.

The third issue was from Powerica Limited, which was of the size of Rs1,100 crore. The issue was subscribed 1.53 times total with QIB portion subscribed 4.74 times, HNI portion subscribed 0.47 times, Retail portion subscribed 0.15 times.

Subscription levels clearly suggest that investors were not quite enthused by this late spurt in IPOs at the fag end of the year, in such turmoil. The only reason for the rush appears to be that many of the documents would expire, hence the urgency, come what may. Let us see what listing has in store and post listing after 15 days, where these shares trade.

Coming to the markets in the week ahead, it will be an action-packed week. We begin the week with the March futures expiry. The current level of NIFTY is at 22,819.60 points, which is down 2,605.05 points or 10.25 per cent lower than the series open at 25,424.65 points.

While Bulls will hope to end the series with minor gains on expiry day, geo-politics indicate that bears will press the pedal. This would be followed by a Tuesday holiday and then trading for the financial year 2026-2027 would begin on Wednesday, the 1st of April.

Friday would again be a holiday, and that weekend would be the self-imposed 10-day ceasefire imposed by the USA, making markets uncertain when we close on Thursday.

In short, extremely choppy, volatile, and nervous times for the markets, with little or no avenue of optimism on the horizon. For this war to end, someone has to lose the war, and that is not happening immediately. Iran is the underdog and has nothing to lose.

Key levels of support are the lows made on Monday, the 23rd of March, at 72,700 and 22,450 points. Lower down, we have support at 22,300 points and then in a broad band of 21,700-21,900 points. Even though we have just three trading sessions to go next week, I am alerting you about support levels. On the resistance side, immediate resistance is at 74,900 and at 23,200 levels. The trade is cautiously using the mind and not emotions.

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