Mkt momentum likely to continue towards new highs

Bulls took the bears by the horn and ran amuck in the last hour of trade. NSE Nifty gained 217 points, while BSE Sensex gained 762 points in one day. The series ended with gains of 747.15 points or 4.21 per cent to close at 18,484.10 points. Very clearly the series belonged to the bulls and Thursday, expiry day was a special day.

The Sensex gained 2,066.10 points or 3.39 per cent to close at 63,099.65 points, while Nifty gained 601.35 points or 3.31 per cent to close at 18,759.35 points. Market breadth has increased significantly, mid and small cap stocks are moving sharply. Second half of December sees FPI's go on leave and one sees sharp movement in the midcap and Smallcap space around this time. Maybe this is the beginning of the same and it would be interesting to see whether the momentum can take us to the end of the year as well.

Dow Jones has had a volatile period and gained on three of the four trading sessions during the period under review. It lost on one of the trading sessions. It maybe mentioned that on Tuesday it was virtually a flat session with Dow gaining a mere 3.07 points. At the end of the period, Dow lost 245.57 points or 0.72 per cent to close at 33,852.53 points. The Fed Chairman addressed a gathering on Wednesday, where he addressed on issues of future rate hikes. This could be an important meeting for the US markets.

There was just one listing in the period under review with shares of real estate developer Rustomjee and corporate entity Keystone Realtors Limited listing on Thursday. The company had issued shares at Rs541 and the share debuted at Rs555, a gain of Rs14 or 2.58 per cent. At the end of the day the price had moved up to R557.80. By Wednesday, the share lost considerable ground and closed below the issue price at Rs536.80, a loss of Rs4.20 or 0.77 per cent.

There were two issues during the week. The first was from Dharmaj Crop Guard Limited which had tapped the markets with its fresh issue of Rs216 crs and an offer for sale of 14.83 lakh shares. The price band of the issue which had opened on Monday (November 28) and closed on Wednesday (November 30), was Rs216-237. The issue was subscribed 38.18 times overall, with QIB portion subscribed 51.31 times, HNI portion subscribed 56.57 times and Retail portion subscribed 23.26 times. There were 13.11 lakh applications.

The second issue is from Uniparts India Limited, which has tapped the capital markets with its offer for sale of 1,44,81,942 shares in a price band of Rs548-577. The issue opened on Wednesday, November 30 and would close on Friday, December 2nd. At the end of Wednesday, the issue was subscribed 0.57 times.

Coming to the markets in the period December 1st to 7th, expect market momentum to continue. The benchmark indices have clearly made a breakout and are now trading at new lifetime highs on a closing basis and even intraday basis. Key support is the intraday high made in October 21 at 62,412 and 18,604 points respectively. As long as these levels hold, expect the momentum to continue. To add to the spice is the fact that FPI's have turned buyers over the last few weeks. If they add to their holdings and market momentum is intact, the market mood will remain buoyant. The mood and movement will end in euphoria, which is some time and distance away. The question on one's mind would be whether Nifty can touch, or cross 19,000 levels. Similar levels on BSE Sensex would be around 63,900-64,000 levels.

Enjoy the current mood as the weather changes to a slightly more pleasant and nip in the air experience in the early mornings and late evenings.

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