Ride the tide, now

Foreign currency on display at a money exchange centre, in Kolkata as the rupee hit a record low of 70.32 against the US dollar, plunging 43 paise. Pic/PTI

The four-trading day week with a mid-week holiday on Wednesday because of Independence Day ended with small gains. What the final change for the week does not capture is that each of the four days saw a net change of close to 200 points on the BSESENSEX. The week began with a loss followed by gains and losses on alternate days to end with a gain of 78.65 points or 0.21 per cent at 37,947.88 points. NIFTY similarly ended with gains of 41.25 points or 0.36 per cent to end at 11,470.75 points. The broader indices saw the BSE100, BSE200 and BSE500 gain 0.43 per cent, 0.50 per cent and 0.40 per cent respectively. BSEMIDCAP was up 0.59 per cent while BSESMALLCAP was up 0.49 per cent.

Stock talk
The top sectoral gainer was BSEHEALTHCARE, up 5.06 per cent followed by BSEIT 2.71 per cent and BSEFMCG 2.32 per cent. The top loser was BSEOIL&GAS down 2.23 per cent, followed by BSECAP GOOD 1.31 per cent and BSEMETAL 1.07 per cent. The top gainer in stocks was Sun Pharma up 11.18 per cent, followed by Lupin 8.08 per cent and then by an identical 6.31 per cent by GAIL and Dr Reddy's. The top loser was Hindustan Petroleum down 6.93 per cent, followed by BPCL 6.32 per cent and HDFC 4.83 per cent.

The rupee
The Indian Rupee was under severe pressure and lost R 1.32 or 1.88 per cent to close at R 70.15. Dow Jones had a decent week and gained 389.46 points or 1.52 per cent to close at 25,720.60 points. The week ahead has a trading holiday on Wednesday because of a religious festival. This holiday would be identical to the one we had last week and divide the week into two equal halves.

New views
In primary market news the issue from Credit Access Grameen Limited would list its shares on Thursday, August 23. The company had tapped the capital markets with its fresh issue and offer for sale to raise R 1,131 crore at R 422. In corporate news the CFO of Infosys, Ragnath has quit after putting in 18 years at the company. He was the CFO since Bansal had quit in 2015. Probably things are not as hunky dory as one may have expected ever after the stink raised my former promoters of Infosys after the Panaya acquisition.

The highest
Benchmark indices like the BSESENSEX and NIFTY are trading at virtually life-time highs with less than 125 points on the BSESENSEX and 25 points on NIFTY. The midcap and small-cap space is where all the pain persists. They are still 12.36 per cent and 19.67 per cent lower than the peaks made in January 2018. With markets looking for euphoria to peak out, the possibility that mid and small caps may catch up with the benchmark could be ruled out.

Tough call
Markets are looking tired and yet they must complete their targets. While over the last six weeks the reading of the markets has been spot on of this writer, it is now becoming increasingly difficult to call the markets. History is always repeated, and one cannot recall an incident where markets peak out, without euphoria setting in. This time around we have already spent too much time reaching so far and it looks like not much time is available from here on. In such an atmosphere, decoding the likely scenario over the next 10 days is getting tougher.

Buying opportunities
It makes sense to continue booking profits and play the waiting game for midcaps and small-caps to correct. Plenty of buying opportunities would be available once the correction sets in. Do not try to jump the gun by shorting the markets and take things as they come. There is an interesting 10 to 15 days ahead in which markets would see euphoria, peak out and sharp corrections begin. Do enjoy the market movement as it happens.

Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd.

Disclaimer: No financial information whatsoever published anywhere in this newspaper should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is for educational and information purposes only.

Catch up on all the latest Crime, National, International and Hatke news here. Also download the new mid-day Android and iOS apps to get latest updates