Choppy days ahead for markets

The period between 22nd April and 28th April, saw the full five trading sessions and markets regaining their strength. They were up on four of the five trading sessions. BSE Sensex gained 2,028.04 points or 4.08 per cent to close at 49,733.84 points while Nifty gained 568.15 points or 3.82 per cent to close at 14,864.55 points. There seems to be a revival in the market and the tendency to drift downwards each time they moved up seems different this time around. Not quite sure whether it has something to do with the April series expiring tomorrow, or something else.

April series expires tomorrow, on Thursday the 29th of April. The previous series of March had expired at level of 14,324.90 points, which means we are currently up by 539.65 points or 3.76 per cent. It's a big advantage and there is no way that the bulls would squander the lead which has been built over just the last five days with acceleration today. Prior to that as of 20th April, Nifty was actually behind by 28 points. While there would be a choppy expiry tomorrow, markets could move in either direction when trading for the new series begins on Friday.

Results so far have been good and markets have reacted to the better results in a positive manner. In the period ahead, we would have Reliance Industries declaring results on Friday, April 30.

Federal-Mughal Goetze India Limited is a 100 per cent owned MNC and had to complete an offer for sale and reduce its shareholding to below 75 per cent to remain listed. It did the OFS on three different occasions in October 2020, December 2020 and January 2021. All three attempts failed. It made a fourth attempt on the 26th and 27th of April and finally succeeded. In this attempt the floor price was Rs 250 and the cut-off price was discovered at Rs 260.10 after the non-retail round was over. The retail round of bidding saw shares being allotted at a price around Rs 276 at the lowest level. Today shares closed at Rs 285.20. Incidentally the closing price was Rs 290.05 on Friday evening when the OFS was announced. The price movement on Monday was Rs 257.80 as the low and Rs 272.75 was the high. This share would see interest going forward as there is a fresh public shareholding created of 1.10 lakh shares.

The first of its kind Invit from the PSU stable opens tomorrow from PowerGrid Corporation Limited. The issue would raise Rs 7,735 crs in a price band of Rs 99-100. The lot size is 1100 units which mean the ticket size would be Rs 1.10 lakh. 25 per cent of the issue is reserved for non-institutional investors which includes retail and HNI's. Allotment would be by drawing lots in case of oversubscription as the allotment of one lot first to all, does not apply here. More details on the issue can be ascertained tomorrow.

Covid-19 front saw the sharp rise in cases in Mumbai abating even as the spike continues in many other parts of the state of Maharashtra and India. Maharashtra extended the lockdown under "Break the Chain" for another fortnight. Election results for four States and one union territory would be announced on Sunday the 2nd of May. While the elections are important for the regional parties, they have been fought very fiercely, in letter and spirit and there has been bloodshed in West Bengal state as well. There would-be knee-jerk reactions to the outcome of the results when trading begins on Monday.

The period ahead would be volatile and choppy first with expiry on day one. This would be followed by the new series trading, election results and then a view on markets going forward. Global cues indicate that markets are quite choppy and seem to be alternating between gains and losses. In such a scenario, it makes sense to buy on dips and sell on rallies and keep positions light. Use any sharp falls as witnessed last week, to add to positions as the underlying strength in the markets is intact.

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