Global cues keep markets under pressure

Markets during the August 18-24 period under review, saw markets gain on three of the five trading sessions and lose on two sessions. Further the gains on Thursday were minor, while the losses on Friday and Monday were sharp. Tuesday saw markets stage a recovery after going down. The last day saw markets oscillating between minor gains and losses before ending with small gains. BSE Sensex closed at 59,000 points, a loss of 1,174.70 points or 1.99 per cent, while NIFTY closed at 17,604.95 points, a loss of 339.30 points or 1.93 per cent.

Dow Jones had a torrid time and lost in four of the five trading sessions. It has been losing for the last three sessions continuously. It lost 1,242.42 points or 3.64 per cent to close at 32,909.54 points. Markets in the US are now getting worried about inflation and whether the FED would raise interest rates by 75 basis points once again when they meet on the 20th-21st of September. This is keeping the markets under pressure.

Adani through a group company has announced an open offer to acquire 26 per cent shares of NDTV Limited at a price of Rs294. This offer is on account of them acquiring 29.18 per cent shares of NDTV through Vishvapradhan Commercial. This company held warrants of RRPR Holding, a promoter group company of NDTV. A group company of Adani Enterprises had acquired the above company VPCL. While the promoters of NDTV believe this is a hostile takeover, the acquirer believes that this is a fair transaction as it involves having advanced an interest free loan of Rs 400 crores to the promoters in 2009-10. The company was owned by Surendra Lunia since 2012 and was sold last week to the Adani group company.

While the issue could be contested in a court, the outcome may at best delay the transaction but the die has been cast. One has to return the loan and it can be never ending. Shares of NDTV which have been rising were up about 12 per cent in the last week at Rs366.05. On Wednesday they closed at Rs384.50 which was the upper circuit of 20 per cent.

Markets made a high of 60,411 on BSE Sensex and then fell sharply over the next three days to make a low of 58,172 points. The fall was over 2,200 points. Similarly on Nifty, the high was 17,992 and the low was 17,345 points. The fall was 650 points. This was steep and gives an indication of the market setup. There is nervousness amongst traders and people are quick to book profits and also buy on sharp declines.

In primary market news the shares of Syrma SGS Technology Limited had a good level of subscription when the issue was open last week. The issue would be listed on Friday the 26th of August and is expected to do well.

The issue from Dreamfolks Limited opened for subscription on Wednesday and was oversubscribed on day one. The issue saw QIB portion subscribed 0.25 times, HNI portion was subscribed 1.39 times and Retail portion was subscribed 7.93 times. Overall, the issue was subscribed 1.96 times.

The period 25th to 31st August has a trading holiday on August 31 on account of Ganesh Chaturthi, the day when Lord Ganesh is brought home. It used to be a celebration in just Mumbai and Maharashtra, but is now a national event. The trading period would therefore be for just four days. It begins with August Futures expiring on Thursday. The series has seen bulls dominate and the lead is 675.35 points or 3.98 per cent. It is a massive one and there is no way that bulls can squander the same. The previous week's top of 60,400 and 18,000 would act as strong resistances on any upside that the markets make while levels of 58,200 and 17,400 would act as strong supports. However, if markets break these support levels, we would have another sharp fall of maybe another 2 per cent in the benchmark indices happening rapidly. The strategy would be to buy on sharp dips and sell on strong rallies. From current levels, the upside and the downside are at similar distances each. Effectively this gives traders ample opportunity to trade. Keep positions light on Tuesday end of day with Wednesday (August 31) being a trading holiday for Ganesh Chaturthi.

(The author is the founder of

Kejriwal Research and Investment Services, an advisory firm)