Markets had a tough week and failed to cross important resistances. They faltered at the very first level on the opening day of the week itself. The rest of the week was spent in trying to regain lost ground.
BSESENSEX lost 298.22 points or 0.48 per cent to close at 61,729.68 points while NIFTY lost 111.40 points or 0.61 per cent to close at 18,203.40 points. The markets saw the broader indices like the BSE100, BSE200 and BSE500 lose 0.59 per cent, 0.58 per cent and 0.48 per cent respectively. BSEMIDCAP lost 0.19 per cent while BSESMALLCAP gained 0.44 per cent. Markets lost on three of the five trading sessions and gained on two sessions.
The Indian Rupee was under pressure and lost 50 paisa or 0.61 per cent to close at Rs 82.66 to the US Dollar. Dow Jones had a quiet week and gained on three of the five trading sessions. Dow gained 126.01 points or 0.38 per cent to close at 33,426.53 points. While the debt limit resolution will eventually happen, as of now it continues to remain in a state of flux and is causing markets to remain confused.
The primary and fresh issue of units from Nexus Select Trust which is a consumption based real estate offering listed on the bourses on Friday. Units which were issued at Rs 100, debuted on the bourses at a discovered price of Rs 102.27 on BSE and Rs 103 on the NSE. They closed day one at Rs 104.26 on BSE and Rs 104.29 on NSE. Gains made were 4.26 per cent on BSE and 4.29 per cent on NSE.
The largest Public Sector bank SBI, reported excellent numbers for the quarter ended March 23 and also its annual results for the year ended March 23. The company reported a net profit of Rs 18,093 crore for the quarter ended March 23 against Rs 15,477 crore in the previous year. For the year ended March 23 the net profit was Rs 55,648 crore against Rs 35,373 crore in the previous year. The bank has declared a dividend of Rs 11.30 for the year. This is the first bank and only the second company in India to declare an annual profit of over Rs 50,000 crore.
RBI has declared a dividend of Rs 87,416 crore for the year 22-23 against Rs 30,307 crs paid for the previous year. This almost three times payment would go a long way in ensuring that the government is able to manage its resources well for the year which would have otherwise seen an impact from divestment target not being met.
The hardly in circulation Rs 2,000 note has been withdrawn by RBI, but would continue to remain legal tender. The common man has been given time till September 30 to exchange these notes from banks till then. Immediately rumour mills have begun talking about the impending issue of Rs 1,000 note to offset the loss of a high denomination note.
The week ahead would see May futures expire on Thursday (May 25). The current value of NIFTY at 61,729.68 points is higher by 288.35 points or 1.61 per cent. While the bulls are ahead its not a comfortable lead and things could change in four trading sessions. It would be an interesting fight between the bull and bears for control of this series.
The highs in the week gone by were made on Monday itself at levels of 65,562.67 points on BSESENSEX and at 18,458.90 points on NIFTY. Markets never recovered to challenge these levels during the week thereafter. This is even though FPIs continue to be buyers through the week barring one day.
Coming to the week ahead, there would be resistance at 18,300-18350 levels on NIFTY and at 62,025-62,175 levels on BSESENSEX. If these levels are crossed, the next resistance would be at the top made on Monday at 18,460-18,480 levels corresponding to 62,600-62,700 on BSESENSEX. On the support side reasonable support exists at levels of 18,000-18,050 or 61,150-61,300 levels. If this is violated, then the next level would be at 17,850-17,900 or 60,700-60,850 levels.
The strategy for the week would be to continue to focus on midcap and Smallcap space. Results and therefore surprises continue in this space. The one heavyweight result which was pending has been declared by SBI and even after an excellent set of results there was virtually no impact on the share price. Results were declared on Friday and on that day, it gained Rs 0.90 at Rs 575.05. For the week, the share lost Rs 3.05 or 0.53 per cent. By and large while there would be intraday volatility, on a weekly basis, we would remain range bound. Trade cautiously.
(Arun Kejriwal is the founder of Kejriwal Research and Investment Services. The views expressed are personal)