Market Watch: After A Volatile Week Expect Aftershocks To Continue

In the past week, the market was in a state of extreme volatility. We had two trading sessions where the BSE SENSEX rose by 1,000 points, and one trading session was twice that of 2,000 points. This clearly shows the fragility of the market and the urgent need to stabilize the market.

Since there are two sharply falling days, one sharply rising day, and two days of trading with a positive deviation, the market has all the actions that people can expect within five trading days.

The final result is that BSE SENSEX fell 1,789.97 points or 3.52% to close at 49,099.99 points, while NIFTY fell 452.60 points or 3.02% to close at 14,529.15 points.

In the broad index, BSE100, BSE200 and BSE500 fell 2.77%, 2.39% and 2.05% respectively. BSE MIDCAP only fell 0.28%, while BSE SMALLCAP rose 1.47%.

In the sectoral index, BSE METAL rose 7.13%, of which Hindalco rose 10.40%, Vedanta rose 8.32%, and Tata Steel rose 5.56%. The sector’s biggest loser was BSETECK, which fell 4.03%, followed by BSEIT, which fell 4.01%.

In terms of individual stocks, Kodak Bank fell 8.00%, followed by HDFC 7.17% and ITC 5.56%. Tech Mahindra fell 7.61%, followed by TCS fell 5.73%, and Wipro fell 4.58%.

The Indian rupee fell sharply on Friday when the index fell nearly 4%, and at the end of the week, it fell by 81 paise or 1.11% to close at 73.46 rupees.

After the Dow Jones Index hit a record high of 32,010 points on Wednesday, it fell 560 points and 470 points on Thursday and Friday, respectively, and closed down 561.95 points or 1.78% to 30,932.37 points.

The four-digit movement on BSE SENSEX is negative 1,155 points on Monday, 1,940 points on Friday, and 1,030 points on Wednesday, which may make people feel unhappy, but only by 2% and 4%.

In this sense, there is no big problem, but three-fifths of the time is worrying. It only expresses the need for market stability. There were other events last week, all of which have had an impact on the mid-term market in the near term.

NSE saw a trading glitch on Wednesday, the fourth such occasion in three and a half years. Even if they plan to conduct an IPO in the coming year, this will have a serious impact on the NSE.

The exchange was unable to provide communication on failures, and large discount brokers calmed down BSE intraday trading, and clients suffered huge losses.

Although the blame game has started and no one is willing to comment or take the blame, the NSE is at fault, because even if the trading must exceed the prescribed time, it did not communicate the resumption of trade.

India’s largest broker “Zerodha” is one of the trading platforms that has been criticized on social media.

In the coming week, the margin standard will change from 25% to 50%. This actually means that day traders will have to provide double the margin, and this may affect trading volume in the short term because traders are already used to the new laws.

In addition to this, since mid-cap and small-cap stocks were basically unaffected by the sharp reversal last week, they may be under pressure from Monday.

The February futures expired and the bulls rose sharply to close at 15,097.35 points. The series rose 1,279.80 points or 9.26%. Most of these benefits come from the first week after the announcement of the union budget.

Readers will remember that the highest record of BSE SENSEX was 52,516 points, while NIFTY was 15,431 points. We have corrected a little more than 50% of February earnings.

In the main market, Heranba Industries Limited’s issue was oversubscribed and received a good response. The overall oversubscription rate for the issue is 83.29 times. QIB’s share is 67.45 times, HNI’s share is 271.15 times, and Retail’s share is 11.84 times. There were a total of 14.55 lakh applications.

The shares issued by Nureca Limited rose by 66.66% on the first day of listing. The company issued 25 lakh shares at a price of 400 rupees per share to attract capital markets.

The stock price closed at 666.65 rupees on the first day. Nureca’s stock rose further, closing at 699.95 rupees this week, a gain of 75%. Stocks belong to the trading to trading category and will remain unchanged for the next eight trading days.

RailTel Corporation Limited’s stock was also listed on the stock exchange on February 26 (Friday). The company explored the market by selling 87.153 million shares at a price range of 93-94 rupees.

The initial issue price of the shares in BSE is Rs 104.60 and Rs 109 in NSE. Their closing price on BSE was 121.40 rupees and their closing price on NSE was 121.35 rupees, an increase of 27.40 rupees or 29.15%.

In the coming week, MTAR Technologies Limited will use the capital market to issue bonds. The company will issue new 21.48 lakh shares and sell 82.24 lakh shares at a price range of 574-575 rupees. The issue will open on March 3 (Wednesday) and will end on March 5 (Friday). The issue will receive a benefit of approximately 596 rupees.

The company is a one-stop solution for highly critical and precision engineering products that can meet the needs of nuclear, aerospace and defense, and clean energy segments. It has been in existence for more than 50 years and has traded with companies such as ISRO, Nuclear Power Corporation, DRDO, and Bloom Energy.

The annual revenue as of March 2020 was 214 crore rupees and the net profit was 45.5 crore rupees. In the nine months ended December 2020, revenue increased to 176 crore rupees and net profit increased to 39.6 crore rupees.

Due to the nature of the business, the company received a free supply of raw materials from many customers, so the sales volume seemed very low. As of March 2020, the company’s earnings per share were 11.11 rupees, and the PE band was 51.67 to 51.77 times.

No comparable participant can be called a competitor of MTAR, which makes them quite unique in nature. It will be a challenge to allocate funds in this issue of approximately 1.03 cr shares.

On the Covid-19 front, there are 11,43,65,953 patients worldwide, 25,36,713 deaths and 8,99,21,259 patients recovered. In India, we saw 1,10,96,442 patients, 1,57,088 deaths and 1,07,73,276 patients recovered.

In the last week, there were 52,59,131 new patients worldwide, 1,31,240 deaths and 87,82,705 patients recovered. In India, we saw 1,91,501 new patients, 1,415 deaths and 1,61,545 patients recovering. Obviously, the number of new patients in India is soaring, and you need to be extra cautious in maintaining social distancing norms.

The market will continue to remain volatile and trade with negative deviations at least earlier this week (if not more). An analogy that comes to mind is aftershocks in a certain area after a strong earthquake.

Similarly, we can take the situation we saw during the week as an example, and we must deal with aftershocks and the resulting volatility.

The strategy will be to use rallies to reduce positions and exposures and use sharp drops to make small purchases. It will take some time for the market to consolidate before any clear trend may emerge.