Latest high indicates further big movement in trading

GST numbers for June were at Rs92,819 cr. The number fell below the Rs1-lakh cr mark after registering the Rs1-lakh plus mark for the last eight months. Very clearly this is as a direct fallout of the 2nd wave of Covid-19

Bulls seem to be having the best of times currently and seem to be celebrating even US I-day. With a holiday in the US markets on Monday, July 5, they managed to log big gains on the day and clock a new intra-day high on BSE Sensex of 53,129.37 points on Tuesday, July 6. For the period under review of July 1-7, BSE Sensex gained 572.05 points or 1.08 per cent to close at 53,054.76 points, while Nifty gained 158.15 points or 1.00 per cent to close at 15,879.65 points. In what would be significant, both the benchmark indices have closed at new lifetime highs, indicating more is to follow. Markets gained on three of the five trading days and lost on two days.

GST numbers for the month of June were at Rs92,819 cr. The number has fallen below the Rs1-lakh cr mark after registering the Rs1-lakh plus mark for the last eight months. Very clearly this is as a direct fallout of the 2nd wave of Covid-19, which had hit the country and various States had imposed restrictions at different times. During the period under review, the primary issue from India Pesticides Limited listed on the bourses. The company had tapped the markets with its fresh issue for Rs100 cr and an offer for sale of Rs700 cr. The price band was Rs290-296. Shares closed day one at Rs 343.15, a gain of Rs 47.15 or 115.93 per cent. In the remaining two days of the period under review, the share lost marginal ground and lost Rs 7.70. The pattern of trading in the share indicates that a big movement should be expected in either direction, within the next three to four trading days.

There are two primary issues, which are tapping the capital markets. The first is from GR Infraprojects Limited which is an offer for sale in a price band of Rs828-837 for a sum of Rs 962cr. The issue consists of 1.15 cr shares. The issue opens on Wednesday (July 7) and closes on Friday (July 9). The company is a road developer and is developing roads under the BOT and HAM models.

The second is also an offer for sale and is from Clean Science and Technology Limited. The issue opens on Wednesday, July 7, and closes on Friday, July 9. The issue is for Rs 1,546.62 cr in a price band of Rs880-900. The company is into the business of making performance chemicals, pharma intermediates and speciality chemicals for the FMCG industry. What is interesting in these two issues is that both are complete offer for sale and this kind of simultaneous issues has not been witnessed probably in the last 15-20 years. Going forward the primary issue pipeline will see larger portion of offer for sale than fresh issues.

Coming to the markets in the period under review going forward from July 8-14, one should expect the bulls to press home their advantage. They have been able to achieve new lifetime highs on closing basis on both the benchmark indices and also on intraday basis on BSE Sensex. Expect more such highs in the period going forward.

The strategy should be to shift focus to large cap from mid-cap and small-cap stocks. Many of the recent high fliers are witnessing down circuits and are suddenly out of focus and have lost attention of almost all investors. This will continue to be the story going forward as well. Results season has begun and TCS would announce its results on Thursday (July 8) followed by Infosys on July 14. This will give an indication for the result season.

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