Markets begin FY24 on bullish momentum

The March 31-April 5 period under review had a mere three trading days, but the mood was completely different. With trading on Friday, Monday and Wednesday, it looked like the markets had begun on a new note with their best foot forward in the new financial year 2023-24. Incidentally Friday was the first trading day of the new financial year. BSE Sensex gained on all the three trading sessions and was up 1,729.22 points or 2.98 per cent to close at 59,689.31 points, while Nifty gained 439.35 points or 2.57 per cent to close at 17,557.05 points.

Dow Jones gained on four of the five trading sessions and lost just on the last day of the period. Dow was up 1,008.13 points or 3.11 per cent to close at 33,402.38 points. It appears that for the moment, the US markets have digested the last Fed hike on March 22 when interest rates were hiked by 25 basis points to a band of 4.75-5 per cent.

RBI is currently in the midst of its monetary policy meeting, which will conclude on Thursday (April 6). It is widely expected that Repo rates would be raised by 25 basis points to 6.75 per cent from the current 6.50 per cent. This hike would be on expected lines.

Friday was a great day at the bourses. It was a game changer day. Over the last couple of days, analysts have turned bullish on Reliance Industries which is the leading bellwether stock. This is one company which with its sheer weight in the indices has the capacity to change the momentum and mood in either direction. The media and analyst reports coupled with the corporate announcement of the company calling an EGM on May 2 to split the share and demerging Jio Financial Services Ltd from the company in the ratio of one for one was enough to lead the market from the front. The share gained Rs95.80 or 4.29 per cent to close at Rs2,331.05 for the day (Friday). For the 3-day week, the share gained Rs84 or 3.75 per cent. It’s not every other week that Reliance, a big heavyweight moves like this. It had done its job of changing the mood on the street and given bulls new hope and strength.

The primary markets have not been very kind and fundraising in 2022-23 has taken a beating. There were 37 companies which tapped the markets during the period and raised Rs51,000 crore against 53 companies which did so in the previous year and raised Rs1.11 lakh crore. What is really disheartening is the performance of these companies which has left a lot of questions unanswered from the promoters and merchant bankers who brought these companies to the market. One hopes that the issues coming to the market in 2023-24 leave something for investors to feel happy. It’s time that the people involved with IPOs, merchant bankers and promoters start looking at investor’s viewpoints when pricing and valuing companies. A significant change that is now happening is that anchor investors in more issues than not, sell on the day that the lock in period is lifted. This is a cause for concern.

The issue from Avalon Technologies Ltd is currently on. It would close for subscription on Thursday (April 6). At the time of writing this article midway through the 2nd day, the issue was subscribed 0.08 times.

The period April 6-12 ahead would have a trading holiday on Friday. Hence, it would be of four trading sessions. The good part is that this would be an international holiday. Hence, there would be no impact of major markets being open, while we are closed. The current rally which has been very strong and swift would need to be digested by the markets. While the optimists would believe that this is the beginning of a new rally the pessimists would believe this was a short covering, NAV propping, Reliance led rally. In any or either case, the proof of the pudding would be in the eating and markets would have to show their strength by digesting these gains and holding on to them.

While markets would be volatile, we would like to see that the gains are held on and not surrendered. While immediate targets for the rally have been met, new resistances would be in the range of 17,650-17,700 on Nifty and 59,950-60,200 on BSE Sensex. In case this gets violated on the upside, next resistance would be around 17,900-950 and 60,700-60,950. This rally has been too swift, too quick and needs to sustain. This is subject to the gains being held. On the support side, we have support around 17,250 on Nifty and 58,700 on BSE Sensex and strong support at 17,050-17,100 on Nifty and 58,100-58,150 on BSE Sensex. One must remember that companies would start announcing dates for their quarterly and annual results shortly.

The strategy would be to allow the markets to settle down and look to make a portfolio with a twelve-month horizon. It may be a good idea to look at companies which have come with their IPOs in the last 12 months and have not done very well in the market, but have reported decent results. These companies would be available at a discount to the IPO valuation and should offer value if invested in. Trade cautiously.

(The author is the founder of

Kejriwal Research and Investment Services, an advisory firm)